Jinchuan Science and Technology turned losses into profits last year and proposed to set up a joint venture company to expand the business of lithium-electric ternary materials.

On April 26th, Jinchuan Science and Technology (837205) disclosed its 2020 annual report that the company realized 4.605 billion in revenue last year, an increase of 22.40% over the same period last year. The net profit belonging to the shareholders of the listed company was 65.8922 million yuan, a loss of 513 million yuan over 2019, an increase of 112.84% over the same period last year.

Jinchuan Technology said that the company's operating income last year was significantly higher than that in 2019, mainly due to a substantial increase in product production and sales during the reporting period, while the purchase prices of raw materials and product sales prices increased to a certain extent over the previous year. The total purchase amount and total sales amount increased over the previous year. The company's net profit changed a large proportion compared with the previous year, mainly because the company strengthened the development of new products, adjusted the product structure during the reporting period, achieved a substantial increase in product sales, and the company's operating condition changed from a loss in 2019 to a profit.

It is reported that Jinchuan Science and Technology, which belongs to the non-ferrous metal smelting and Calendering industry (code C32), is one of the most important manufacturers of ternary precursors of cobalt, cobalt tetroxide and nickel-cobalt-manganese ternary precursor in China. for the production of lithium cobalt oxide cathode materials for secondary batteries, lithium nickel cobalt manganate cathode materials and heat-resistant alloys, magnetic materials, catalysts and other products to provide a variety of products, high technical content, uniform and stable products. The company mainly develops its business through the direct sales model, and the source of income is mainly from product sales.

According to the annual report, Jinchuan Science and Technology currently has two wholly-owned subsidiaries, among which Lanzhou Jintong Energy Storage Power New Materials Co., Ltd. (hereinafter referred to as "Jintong Company") is mainly engaged in the research, development, production and sales of binary and ternary precursor materials for lithium batteries, with a revenue of 1.566 billion yuan and a net profit of 29.0903 million yuan last year. Jinchuan Cobalt products Company, a subsidiary of Jinchuan Technology Holdings, specializes in cobalt product sales and raw material trade, with a revenue of 695600 yuan last year.

It is worth noting that on the same day the annual report was disclosed, Jinchuan Technology also announced that according to the needs of the company's operation and development, the company's wholly-owned subsidiary Jintong Company plans to jointly fund a joint venture with Evergrande Yunhong New Energy (Shenzhen) Co., Ltd. (hereinafter referred to as "Evergrande Yunhong"). The joint venture company intends to have a registered capital of 1 billion yuan, of which Jintong Company has contributed 660 million yuan with its three-yuan precursor production line assets, accounting for 66.00% of the registered capital; Evergrande Yunhong contributed 340 million yuan in cash currency, accounting for 34% of the registered capital.

Subsequently, Jinchuan Science and Technology issued an announcement that Jintong Company, a wholly owned subsidiary of the company, intends to invest in Lanzhou Evergrande New Energy Technology Development Co., Ltd. (hereinafter referred to as "Lanzhou Evergrande New Energy"). Jintong Company plans to subscribe an additional capital of 340 million yuan to Lanzhou Evergrande New Energy in cash. after this capital increase, Jintong Company will hold 14.53% of the capital contribution of Lanzhou Evergrande New Energy, and Lanzhou Evergrande New Energy will become a shareholding subsidiary of Jintong Company.

Battery network noted that Evergrande Yunhong and Lanzhou Evergrande New Energy actual control per capita is Evergrande New Energy Technology Group Co., Ltd. Jinchuan Science and Technology said that whether it is to set up a joint venture with foreign investment or to increase capital and shares, the main purpose is to form close cooperation with partners in the field of ternary materials for lithium batteries, give full play to their respective advantages in resources, technology, and market, and jointly expand the cause of nickel-cobalt-manganese ternary precursor materials to enhance the company's profitability in the future.

According to the plan, Jinchuan Science and Technology will still take new energy battery materials as the main strategic development direction in the future, form a complete industrial chain from the comprehensive utilization of nickel and cobalt resources to terminal battery materials, and devote itself to building international first-class new energy materials high-tech enterprises.