Feasibility analysis report on the use of funds raised by Farasis Energy (Gan Zhou) Co.Ltd(688567) (Ganzhou) Co., Ltd. by issuing A-Shares to specific objects in 2021
(Revised Version)
February, 2002
1、 Use plan of the raised funds
The total amount of shares issued to specific objects this time is 4520 million yuan (including this amount). After deducting the issuance expenses, the raised funds are intended to be used for the following projects:
Unit: 10000 yuan
No. project name total investment amount proposed to be invested with raised funds
1 high performance power lithium battery project 525625.90 392000.00
2. Science and technology reserve fund 60000.00 60000.00
Total 585625.90 452000.00
Before the funds raised from this issuance to specific objects are in place, the company can invest in advance with self raised funds according to the actual progress of the projects to be invested by the raised funds, and replace them in accordance with the procedures specified in relevant laws and regulations after the raised funds are in place.
After the funds raised from this issuance to specific objects are in place, if the actual raised funds after deducting the issuance expenses are less than the total amount of the funds raised from the above projects, the board of directors or the authorized person of the board of directors will, within the scope of the above-mentioned investment projects with raised funds, according to the actual situation such as the progress of the investment projects with raised funds and the demand for funds, Adjust the priority of the investment of the raised funds and the specific investment amount of each project. The insufficient part of the raised funds shall be solved by the company with its own funds or self raised funds.
2、 Background of the project invested by the raised funds
(I) under the wave of carbon neutralization, the global new energy vehicle market has huge growth space
After the Paris agreement was reached in 2015, more than 30 countries and regions, including the European Union, Canada, Japan and China, have successively introduced the policy goal of carbon peaking or carbon neutralization. The core of carbon neutralization is to control global carbon emissions. The key measure to control carbon emissions is to change the current supply and consumption mode that mainly depends on fossil energy. Generally speaking, the energy intensity is negatively correlated with the level of electrification, and the improvement of the level of electrification can effectively reduce carbon dioxide emissions. From the consumption side, one of the main consumption areas of fossil energy is the transportation sector. According to the statistics of the International Energy Agency (IEA), the global carbon dioxide emissions in 2018 were about 33.5 billion tons, and the carbon dioxide emissions of the transportation sector were 8.3 billion tons, accounting for about 25%, of which land transportation accounted for about 18% of the global carbon dioxide emissions. The electrification degree of the global transport sector was only 1% in 2018. Under the goal of carbon neutrality, the electrification process of the global transport sector needs to be further accelerated. According to the plan of the International Renewable Energy Agency (Irena), by 2050, the proportion of electricity in global end energy consumption will increase from 21% in 2018 to 51%, of which the electrification rate of the transportation sector will increase to 43%. In order to achieve the above objectives, major economies such as the European Union and the United States have introduced strict fuel vehicle restriction policies, set electrification targets for the automotive industry and increased support for the new energy vehicle industry.
In September 2020, the European Commission launched the 2030 climate target plan, which clearly increased the independent contribution of EU countries under the Paris agreement from the previous target of reducing emissions by 40% compared with 1990 to at least 55%. In the context of stricter carbon emission assessment, European governments (especially Germany and France) frequently issued policies to support the development of new energy vehicle industry. In 2020, the German government adopted a support plan with a total value of 2 billion euros to promote the upgrading of German local auto enterprises to new energy smart vehicles; France aims to produce 1 million new energy vehicles by 2025, and there will be no vehicles using fossil fuels by 2040.
In February 2021, the United States returned to the Paris Agreement and promised to reduce its carbon emissions by 50% from 2005 by 2030 and achieve carbon neutrality by 2050 at the latest. In the $2.25 trillion infrastructure investment plan announced by the new US government in 2021, it is mentioned that $174 billion will be invested in the electric vehicle market to strengthen the electric vehicle supply chain, charging pile construction, tax incentives, etc; By 2026, the share of new energy vehicles in the United States will reach 25%, and by 2030, 95% – 100% of the sales of light vehicles in the United States will reach the zero emission standard; Achieve a net zero emission target and a 100% clean energy economy by 2050. The U.S. government has set a target that electric vehicles will account for 50% of new car sales by 2030.
In 2020, Chinese leaders promised the world at the United Nations General Assembly that China will strive to peak carbon dioxide emissions by 2030 and achieve the goal of carbon neutrality by 2060. In order to achieve the above objectives faster and better, the state has increased the promotion of new energy vehicles, and put forward further relevant measures on adjusting emission standards, purchasing new energy vehicles, eliminating old diesel trains, circulation of second-hand cars, automobile consumption and financial policies.
Under the wave of carbon neutralization, the electrification process of the global automobile industry will be further accelerated. According to the prediction of IEA, in order to achieve the global emission reduction target in 2050, the global ownership of new energy vehicles needs to increase from 7.2 million in 2019 to 1.1 billion in 2050. The global new energy vehicle market has huge growth space in the future.
(II) China has issued a number of policies to promote the completion of the “double carbon” task, with the promotion of new energy vehicles as the main focus
In December 2020, China’s central economic work conference set the goal of “China’s carbon dioxide emissions strive to peak by 2030 and achieve carbon neutralization by 2060”, and listed “doing a good job of carbon peak and carbon neutralization” as one of the eight key tasks in 2021. “Carbon peak and carbon neutralization” has become the core topic of China’s modernization drive.
Green transportation is an important link to achieve the “double carbon” goal. Advocating green travel and promoting new energy vehicles are the main policy directions of green transportation at present. The substitution of new energy vehicles for traditional fuel vehicles can effectively reduce the carbon emissions of the transportation industry. China’s relevant industrial policies mainly drive the development of the new energy vehicle industry from both sides of supply and demand. On the supply side, implement the double credit policy to promote car enterprises to layout new energy vehicles and complete the credit requirements, so as to promote the rapid development of the new energy vehicle market; On the consumer side, the Ministry of Finance and others guide consumers to buy new energy vehicles through tax policies.
In November 2020, the general office of the State Council issued the new energy vehicle industry development plan (2021-2035), which plans that the sales of new energy vehicles will reach about 25% of the total sales of new vehicles by 2025; It is planned that by 2035, pure electric vehicles will become the mainstream of newly sold vehicles, vehicles in the public domain will be fully electrified, and fuel cell vehicles will be commercialized.
Under the guidance of the policies of various ministries and commissions, various regions have successively launched the development plan of new energy vehicles. Local development plans have set targets for the ownership of new energy vehicles. At the same time, policies for the construction of charging piles and hydrogen stations have been strengthened to optimize the infrastructure of new energy vehicles.
(III) adhere to the mission of “providing green energy and building a smart world”
Farasis Energy (Gan Zhou) Co.Ltd(688567) as an overall energy solution provider, since its establishment, it has always adhered to the mission of “providing green energy and building a smart world”, integrated sustainable development into daily work, processes and details, and actively assumed China’s and global economic, ecological and social responsibilities. Through its own R & D and manufacturing capabilities, the company has created clean energy solutions that meet the needs of consumers and lead the development of the industry. Together with foreign partners, the company has jointly promoted the realization of sustainable development goals, and helped the country achieve the goals of “carbon peak” and “carbon neutralization” through carbon neutralization in mobile travel and energy use.
In order to achieve the global goal of “carbon neutrality”, Farasis Energy (Gan Zhou) Co.Ltd(688567) customers have put forward the implementation plan of electrification strategy:
In the overseas market, Daimler clearly announced the specific time of stopping the sale or shutdown of fuel vehicles. Among them, Daimler plans to provide pure electric vehicles for all market segments by 2022; From 2025, all newly released vehicle architectures will be pure electric platforms. Three pure electric vehicle architecture platforms will be released in 2025, and comprehensive pure electric preparations will be made before 2030; Daimler also plans to build more than 200 gigawatt hours of battery cell capacity with partners.
In the Chinese market, Guangzhou Automobile Group Co.Ltd(601238) released the “glass green net plan”, which will adhere to the support of scientific and technological innovation. In addition to the implementation of various measures of electrification, it will systematically promote green procurement, green manufacturing and green recycling, form a new green and low-carbon ecosystem in the whole chain from R & D to production and from purchase to use, realize sustainable development and help carbon peak Carbon neutralization makes the world cleaner and more beautiful. At the same time, Geely, Dongfeng, great wall, Tianji, Jiangling and other customers have also put forward their own electrification strategy.
According to the electrification strategy of customers at home and abroad, the company will not only continue to customize high-quality battery products for customers, but also actively expand production to prepare for the rapid growth of customers’ demand.
3、 Investment projects of the raised funds
(I) high performance power lithium battery project
1. Project overview
In combination with the iterative evolution trend of new energy battery technology, the latest production process of new energy battery and the upgrading needs of downstream customers, the company will obtain land in Sanshan Economic Development Zone, Wuhu City, Anhui Province, build a high-performance power lithium battery project, and purchase advanced power lithium battery production equipment to meet the needs of the company through the construction of production plants and supporting facilities, After the completion of the project, the annual production capacity of 12gwh power battery system will be realized. After the implementation of the project, the company can further industrialize the core technology, grasp the growth opportunities of the downstream new energy vehicle market, deepen the partnership with high-quality customers at home and abroad, provide development momentum for the company to deeply participate in the future industrial reform, and help the country achieve the goals of “carbon peak” and “carbon neutralization”.
2. Project investment estimate
The investment estimate of the project is as follows:
Unit: 10000 yuan
No. project or cost name investment amount in total investment proportion
1. Construction cost 443193.04 84.32%
Construction and installation project 1391.79%
1.2 equipment purchase and installation 289551.18 55.09%
1.3 land use fee 11373.60 2.16%
1.4 other expenses of project construction 3082.48 0.59%
2. Basic reserve fund 22159.65 4.22%
3. Initial working capital 60273.21 11.47%
The total investment of the project is 525625.90 100.00%
3. Estimated economic benefits of the project
After calculation, the after tax static investment payback period of the project is 6.95 years, and the after tax internal rate of return is 12.80%. 4. Implementation subject, project site selection and construction period
(1) Implementation subject
The project to be implemented in Anhui Sanhu economic development zone is a wholly-owned subsidiary.
(2) Project site selection
The target plot of the project site is located in Anhui Wuhu Sanshan economic development zone.
(3) Construction planning
The project is planned to be completed in 18 months.
5. Project filing and EIA
On October 14, 2021, the company has obtained the notice on Approving the registration and filing of high-performance power lithium battery project of Farasis Energy (Gan Zhou) Co.Ltd(688567) (Wuhu) Co., Ltd. (SJF [2021] No. 359) issued by the Economic Development Bureau of the Management Committee of Wuhu Sanshan Economic Development Zone, Anhui Province.
The issuer implements the construction of high-performance power lithium battery project on the existing land of Anhui Wuhu Sanshan economic development zone. On November 16, 2021, the company won the right to use state-owned construction land with parcel No. (III) 202118 in Wuhu Sanshan Economic Development Zone by listing, and signed the transaction confirmation on the same day. Up to now, the company has signed the transfer contract of state-owned construction land use right with Wuhu natural resources and Planning Bureau, paid the land transfer fee, and will handle the land use certificate later.
The issuer has obtained the approval document of environmental impact assessment (wuhuanshen [2021] No. 248) on December 8, 2021.
(II) science and technology reserve fund project
1. Project overview
The company plans to raise 600 million yuan for science and technology reserve fund projects through the issuance of shares according to the current actual operation situation and in combination with the future development plan. Specific investments include but are not limited to: research and development of new products, research and development of product supporting materials, optimization of product performance, development of optimal process route, expansion of existing production line, technological upgrading, etc.
2. Implementation subject
The main body of the project is Farasis Energy (Gan Zhou) Co.Ltd(688567) (Ganzhou) Co., Ltd.
3. Fund utilization arrangement
High performance power lithium battery is an important part of the issuer’s sales revenue. According to the purpose of the company
