Gree Electric Marching into NEV Market, Acquiring 30.47% of Yinlong New Energy's Equity

SHANGHAI, Sep 1 (SMM) – Gree Electric announced that it has bid for 30.47% of Yinlong New Energy's equity through the public judicial auction. Dongmingzhu, Gree’s chairman of the board, entrusted her 17.46% of the Yinlong equity to Gree.

After the transaction is completed, Gree Electric will control 47.93% of Yinlong New Energy's voting rights, and Yinlong New Energy will become a holding subsidiary of Gree Electric.

Dong Mingzhu's advocated to wholly acquire Yinlong New Energy for diversified expansion in 2016, but it was ultimately denied by Gree’s shareholders, and Dong Mingzhu invested in Yinlong in her personal capacity, together with Liu Qiangdong, chairman of JD.com, and Wang Jianlin, chairman of Wanda Group.

At that time, Zhuhai Yinlong's valuation was 13.4 billion yuan. However, the listing of Yinlong New Energy failed. Yinlong New Energy's shares have been auctioned many times in 2020, but there were few buyers. Now, Gree Electric has become the controlling shareholder of Yinlong New Energy, and Dong Mingzhu is getting closer to her visions in the automobile industry.

Yinlong New Energy has more than 40 production lines for lithium titanate and LFP, and the overall actual battery production capacity is about 18.31GWh/year. Among them, the actual production capacity of lithium titanate batteries is 2.85GWh/year, ranking in the forefront of the world. The actual production capacity of LFP is also at the top level in China. In the context of the shortage of lithium battery production capacity, Yinlong New Energy’s existing capacities will be put into production in a short period to stabilise the market supply.

However, Yinlong New Energy's performance was poor. Gree’s announcement shows that in 2020, Yinlong New Energy’s operating income was 4.33 billion yuan, operating profit was -836 million yuan, net profit was -682 million yuan, and net cash flow from operating activities was 3.17 billion yuan. As of the end of July 2021, Yinlong New Energy’s unaudited revenue was 1.076 billion yuan, operating profit was -958 million yuan, net profit was -763 million yuan, total liabilities were 22.729 billion yuan, and accounts receivable were 4.613 billion yuan.

The future development of Yinglong New Energy as a subsidiary of Gree remains to be seen.