Lopal (603906.SH) secures a 5 billion yuan "mega order" for its overseas factory.
Lopal announced that its controlled grandchild company, LBM NEW ENERGY (AP) PTE. LTD. (hereinafter referred to as "Liyuan (Asia-Pacific)"), has signed a Production and Pricing Agreement with Eve Energy Malaysia Sdn. Bhd. (hereinafter referred to as "Eve Energy"). The agreement stipulates that Liyuan (Asia-Pacific) is expected to sell 152,000 mt of LFP cathode materials to Eve Energy and its affiliates from 2026 to 2030, with the total contract value expected to exceed 5 billion yuan.
The announcement mentioned that the selling price, subject to the principle of pricing, is influenced by fluctuations in raw materials and will be confirmed quarterly by both parties in accordance with the terms of this agreement. If the contract is executed smoothly, it will have a positive impact on the company's future performance.
Eve Energy is an overseas subsidiary of EVE, a top-tier battery enterprise, primarily engaged in the manufacturing of cylindrical lithium-ion batteries for power tools, two-wheelers, and cleaning tools. In February this year, the first battery rolled off the production line at EVE's Malaysia factory, marking the commencement of production operations at EVE's first overseas factory.
It is reported that Lopal is the first domestic company to establish an overseas factory for the production of LFP, with its overseas factory construction primarily concentrated in Indonesia. In 2021, Lopal announced plans to establish an LFP production base in Indonesia, with a total planned capacity of 120,000 mt of LFP.
According to the investor relations activity record released by Lopal recently, the first phase of the 30,000 mt project of its subsidiary, Indonesia Liyuan, commenced production at the beginning of 2025 and has successfully achieved mass production and shipment to overseas customers' factories, currently maintaining a high capacity utilisation rate. The construction of the second phase of the 90,000 mt project of Indonesia Liyuan has commenced, with completion and equipment commissioning expected by the end of this year.
In fact, Lopal has recently been frequently increasing its investment and introducing investors into its Indonesia factory. Previously, in December last year, Lopal announced that the company, Changzhou Liyuan, INA, Aisis, and Liyuan (Asia-Pacific) had jointly signed relevant subscription agreements and shareholders' agreements. INA intends to invest 150 million US dollars to acquire approximately 32.97% of the equity in Liyuan (Asia-Pacific); Aisis intends to invest 50 million US dollars to acquire approximately 10.99% of the equity; and Changzhou Liyuan or its affiliates intend to invest 30 million US dollars. Upon completion of the transaction, although Changzhou Liyuan's shareholding in Liyuan (Asia-Pacific) will decrease to 56.04%, it will still maintain a controlling position, and the scope of the company's consolidated financial statements will remain unchanged.
On May 30 this year, Lopal once again announced that the company plans to increase the capital of its controlled subsidiary, Changzhou Liyuan New Energy Technology Co., Ltd., with 80% (equivalent to 370 million yuan) of the funds raised through the issuance of H shares on the Hong Kong Stock Exchange. Upon completion of the capital increase, Lopal's shareholding in Changzhou Liyuan will increase from approximately 64.03% to 66.42%. Meanwhile, Changzhou Liyuan plans to utilize the funds raised from this capital increase to further increase its capital investment in Liyuan (Asia Pacific), a subsidiary controlled by Lopal, by $14 million.
