BYD supply chain to purchase Lithium Salt from Rongjie Co., Ltd. is expected to increase the order by 300 million yuan.

On the evening of April 13th, Rongjie (002192) issued an announcement on the increase of its forecast for daily related party transactions in 2021. According to the announcement, due to increased customer demand and rising product prices, the company in 2021 (including subsidiaries within the scope of the consolidated statement), Hereinafter collectively referred to as "the Company") and Shenzhen BYD supply chain Management Co., Ltd. (hereinafter referred to as "BYD supply chain"), a wholly owned subsidiary of BYD Co., Ltd. (hereinafter referred to as "BYD supply chain"), Chengdu Rongjie Lithium Industry Technology Co., Ltd. (hereinafter referred to as Chengdu Rongjie Lithium Industry Technology Co., Ltd.), a holding subsidiary of the company's controlling shareholder Rongjie Investment holding Group Co., Ltd. (hereinafter referred to as "Rongjie Group"), The total amount is expected to be no more than 550 million yuan (of which, the order for selling lithium salt to BYD's supply chain is expected to be 300 million yuan); With the related party Rongjie Group holding subsidiary Hefei Rongjie Metal Technology Co., Ltd. (hereinafter referred to as "Rongjie Metal") and Chengdu Rongjie Lithium Industry, the daily related transactions for purchasing raw materials are expected to be no more than 230 million yuan. The transaction contract will be valid within 2021 from the date of approval of the general meeting of the company.

Battery Network also noted that on January 8 this year, Rongjie issued an announcement that in 2021, Sichuan Chang and Hua Li Technology Co., Ltd., a subsidiary within the scope of the company's consolidated statements, based on the needs of daily production and operation, it is proposed to sell lithium salt products to the supply chain of BYD, a wholly-owned subsidiary of BYD, with a total amount of no more than 100 million yuan. The transaction contract will be signed within 2021 from the date of approval by the general meeting of the company. With Rongjie's new order of 300 million yuan, the company is currently selling lithium salt to BYD's supply chain with an estimated amount of 400 million yuan.

It is reported that BYD has huge assets and income, high operating level and profitability, and is one of the leaders in the global power battery field and new energy vehicle industry. BYD has a large technological R & D team and strong scientific and technological innovation capability, and has successively developed a series of global leading forward-looking technologies, establishing a global leading edge in the field of new energy vehicles and a global leading technological advantage and cost advantage in the field of power batteries.

Chengdu Rongjie Lithium Industry was established in March 2017. Its main business includes the R & D, production and sales of lithium salt products such as lithium carbonate, lithium hydroxide and lithium chloride. Chengdu Rongjie Lithium Industry has a planned production capacity of 40,000 tons per year. The first phase of the project is undergoing equipment commissioning and is scheduled to be put into production in the second quarter of 2021.

Rongjie Metal is mainly engaged in the development, production and sales of cobalt, nickel, copper, lithium and other non-ferrous products, its main products are cobalt tetroxide and other cobalt materials, mainly used in the manufacture of lithium-ion battery cathode materials.

Rongjie said that the company's lithium salt products belong to BYD's upstream raw materials, through this transaction, the company can increase the source of orders, increase the sales scale; BYD can increase the procurement channels of lithium products. The related party transaction between the company and BYD is the business cooperation between the upstream and downstream of the lithium battery industry chain.

Rongjie shares has strong market development ability of lithium salt products, but at present, the company's own lithium salt production capacity can not meet the needs of downstream customers; in order to better meet the needs of downstream customers, the company purchases lithium salt products from related parties Chengdu Rongjie Lithium Industry and Rongjie Metal for production or sales. The related party transaction between the company and Chengdu Rongjie Lithium Industry and Rongjie Metal is the business cooperation between the upstream and downstream of the lithium salt industry chain.

In addition, Rongjie revealed during its interaction with investors on April 6 that the current lithium ore mining capacity is 1.05 million tons / year, and the refined ore capacity is 450000 tons / year, and the company will carry out mining according to this production capacity.