Zhongke Electric holds hands in the Ningde era to build an integrated project with an annual output of 100000 tons of lithium anode materials.

On February 20th, Zhongke Electric (300035) issued an announcement, and the board of directors held on February 19th examined and approved the motion on increasing capital and shares of Zhongke Xingcheng Graphite Co., Ltd., a subsidiary of Gui'an New area, and cooperating with Ningde Times. Agreed with the company, Hunan Zhongke Star City Holdings Co., Ltd. (hereinafter referred to as "Zhongke Star City Holdings"), Gui'an New area Zhongke Star City Graphite Co., Ltd. (referred to as "Gui'an New area Zhongke Star City") and Ningde Times New Energy Technology Co., Ltd. (referred to as "Ningde Times") signed the Capital increase Agreement of Gui'an New area Zhongke Xingcheng Graphite Co., Ltd.

According to the agreement, Zhongke Star City Holdings and Ningde Times will increase the capital of Zhongke Star City in Gui'an New area. Among them, China Science Star City Holdings will increase RMB 420 million to Zhongke Star City in Gui'an New area. Ningde Times or its wholly-owned subsidiaries will increase RMB 280 million to Zhongke Star City in Gui'an New area. After the completion of this capital increase, the registered capital of Zhongke Star City in Gui'an New area will be increased from 100 million yuan to 800 million yuan. Ningde Times and its wholly-owned subsidiaries hold 35% of its equity after the capital increase, while China Science Star City Holdings will hold 65% of its equity after the capital increase.

According to the project construction plan, the first phase of Zhongke Xingcheng "annual output of 100000 tons lithium battery anode materials integration project" plans to build 65000 tons capacity ("first phase expansion project"); the second phase is proposed to build 35000 tons capacity ("second phase expansion project"). It is worth mentioning that the project has sounded the horn of construction on January 4, with a total planned investment of 2.5 billion yuan and an estimated annual output value of not less than 3.5 billion yuan.

From the point of view of the business cooperation plan, after the Ningde era and Zhongke Star City Holdings jointly invested in Zhongke Star City in Gui'an New area, and after the negative expansion project of Zhongke Star City in Gui'an New area was completed and put into production, Ningde Times has priority in purchasing the production capacity of these negative expansion projects, that is, Zhongke Star City in Gui'an New area will give priority to ensuring the supply of graphitized negative products ("negative products") in Ningde era.

Zhongke Electric said that the company's subsidiary Zhongke Star City in Gui'an New area to increase capital and shares and cooperate with Ningde Times will help the company to deepen cooperation with downstream manufacturers in the field of lithium batteries, integrate the advantageous resources of both sides, and achieve win-win cooperation. at the same time, it can also provide financial support for the company's lithium cathode business development, accelerate capacity expansion, and ensure the company's capacity utilization. Help the company to adapt to the new energy lithium-ion battery industry market competition and rapid development, in line with the company's development strategy and long-term planning.

Zheshang Securities latest research report analysis, the current Ningde era production capacity accelerated release month by month, China Science Electric supply rapid expansion in the context of shipments to the Ningde era is expected to increase significantly. In 2021-2022, the shipment of negative electrode will increase significantly from 24000 tons in 2020 to nearly 60, 000 tons and 12-130000 tons, which will substantially enter the first echelon of power negative electrode, and the company will expand the production of 100000 tons of negative electrode materials in combination with 100 million tons, so the medium-and long-term shipment will be better guaranteed.

Bank of China Securities recently reported that affected by the global new energy vehicle industry and downstream customer demand growth, China Science and Technology Electric 2021 anode material production and sales increased significantly compared with the same period last year, and the annual sales are expected to reach 55-60,000 tons. The company continues to increase the production capacity of negative materials, successively laying out 100000 tons of integrated production capacity in Gui'an New area of Guizhou, 100000 tons of integrated production capacity of Qujing in Yunnan, and 45000 tons of graphitization capacity of Guizhou Zhongke. By the end of 2022, the company's anode material production capacity is expected to reach 250000 tons, and the graphitization self-supply ratio is expected to increase to 80%. According to the production capacity planning announced by the company, the company's negative material production capacity is expected to reach 34-350000 tons in the future.