940 million yuan! Fengyuan Co., Ltd. plans to raise more funds and expand the production of 50,000 tons of lithium iron phosphate cathode materials.

On the evening of January 12, Fengyuan shares (002805) disclosed the plan for a non-public offering of A shares in 2022. The company intends to raise no more than 940 million yuan from no more than 35 specific targets, including Zhao Guanghui, the company's controlling shareholder and actual controller. After deducting the issuance cost, it will be used for the "annual production base project of lithium battery lithium iron phosphate cathode material" and "supplementary liquidity project".

The use of Fengyuan's share raising funds

It is reported that the main body of the project of lithium battery lithium iron phosphate cathode material production base with an annual output of 50, 000 tons is Anhui Fengyuan lithium energy, the holding subsidiary of Shandong Fengyuan lithium energy, a wholly-owned subsidiary of Fengyuan shares, with a total investment of 920 million yuan. it is proposed to use this issue to raise 714 million yuan, and the project introduces advanced production equipment at home and abroad to build an annual production line of lithium battery lithium iron phosphate cathode materials with an annual output of 50, 000 tons After the project is put into production, the company will have a total capacity of 60,000 tons of lithium iron phosphate cathode materials.

According to the data, Fengyuan Co., Ltd. was established in August 2000. According to the company's development strategy, the company set up a wholly owned subsidiary, Shandong Fengyuan Lithium Energy, in 2016, forming the process of preparing lithium iron phosphate cathode materials by solid-state method, cutting into the field of new energy cathode materials. In addition to lithium iron phosphate, the company also promotes the technical route of ternary materials in parallel, showing the coexistence of two wings of cathode materials for lithium batteries. From January to September in 2021, the sales revenue of lithium battery cathode materials business has accounted for 65% of the company's total revenue, realizing a comprehensive transformation and upgrading from traditional chemical enterprises to new energy lithium battery cathode materials enterprises.

Fengyuan shares said that in the face of the relatively scattered competition pattern of lithium iron phosphate cathode materials, and in the case of companies in the same industry expanding production one after another, the company's existing 10,000 tons of lithium iron phosphate capacity no longer has the competitive advantage of scale. If the company does not expand its production capacity in time, it may be in a disadvantageous position in the future market competition. The fund-raising investment project will be used to build an annual output of 50,000 tons of lithium iron phosphate cathode material in Anqing City, Anhui Province, which can effectively supplement the existing production capacity, help to enhance the company's scale advantage, and further enhance the company's industry status. If the fund-raising project and the previous project reach production smoothly, the company will have a production capacity of 60,000 tons of lithium iron phosphate cathode material, which can effectively cope with the increasingly fierce market competition and open up the market space. the implementation of this fund-raising project is the inevitable choice for the company's management and development.

Battery network learned that Fengyuan shares have successfully passed the supplier qualification certification of major customer BYD, and officially began batch supply in July 2021. Under the trend of rapid warming of lithium iron phosphate technology route, BYD, as the leader of lithium iron line, has obvious competitive advantages in new energy vehicle models, and the hot sale of vehicles has led to the rapid improvement of lithium iron phosphate battery installation. In the third quarter of 2021, BYD's average monthly installed capacity of power batteries was 2.4 GWH. According to the estimated demand for 2500 tons of lithium iron phosphate cathode materials corresponding to 1GWh, BYD needs 6000 tons of lithium iron cathode materials per month, and the demand is expected to continue to increase. At this point, the company seizes the opportunity to successfully introduce BYD, which will bring a strong guarantee for the release of the company's lithium iron phosphate products.

In addition, in November 2021, Shandong Fengyuan Lithium Energy signed a "Cooperation Agreement" with Penghui Energy, agreeing that Penghui Energy will purchase lithium iron phosphate and lithium nickel cobalt manganate products from Shandong Fengyuan Lithium Energy from December 2021 to December 2022, with a total contract amount of about 800 million yuan.

Through the implementation of this investment project, Fengyuan shares can further strengthen in-depth cooperation with important customers such as BYD and Penghui Energy, and give full play to the advantages of both sides in technology, market, channel and brand in the industrial chain. while improving the company's profitability, it will also enhance the company's technological innovation ability, promote the company's market expansion, and promote the company's future sales performance.

It is worth noting that the production base project of lithium battery lithium iron phosphate cathode material with an annual production capacity of 50,000 tons proposed by Fengyuan shares has been started in Anqing, Anhui Province on November 27th, 2021. The production base project covers a total area of 132mu, with a construction area of 47900 square meters. the total design capacity is 50, 000 tons of lithium iron phosphate per year, and the project is implemented in two phases, with a construction scale of 25000 tons per year.