On February 22, Tianyu Eco-Environment Co.Ltd(603717) (603717) announced that in order to realize the company’s strategic layout and improve the company’s sustainable profitability, the company plans to increase the capital of Qinghai juzhiyuan new materials Co., Ltd. with no more than 610 million yuan in cash for its capacity improvement and business development. Recently, the two sides have reached a preliminary intention. After the capital increase is completed, the company will hold 51% of the equity of Qinghai juzhiyuan to achieve the purpose of holding shares.
The target company Qinghai juzhiyuan was established in January 2016 with a registered capital of 150 million yuan. Its business scope includes the R & D, production and sales of lithium hexafluorophosphate, lithium battery anode and cathode materials and lithium battery ternary materials. The current product of the target company is “lithium hexafluorophosphate”, which is widely used in the manufacturing field of high-performance lithium batteries.
It is reported that the four most important parts of lithium battery are cathode material, cathode material, diaphragm and electrolyte, while lithium hexafluorophosphate is the most important part of electrolyte cost. At present, China’s lithium hexafluorophosphate production enterprises are relatively concentrated, and the main manufacturers include: Do-Fluoride New Materials Co.Ltd(002407) , Shandong Shida Shenghua Chemical Group Company Limite(603026) , Xintai materials, Guangzhou Tinci Materials Technology Co.Ltd(002709) , Zhejiang Juhua Co.Ltd(600160) , Ningbo Shanshan Co.Ltd(600884) .
The announcement pointed out that Qinghai juzhiyuan has 10 independent intellectual property rights (patents) for the production of related products, and another 11 patents are under application, a total of 21. At the same time, the target company has been approved by the Management Committee of Qaidam circular economy experimental zone for the construction project of high-end lithium hexafluorophosphate with an annual output of 6000 tons, of which the first phase of the production line with an annual output of 2000 tons of lithium hexafluorophosphate has been completed in the second half of 2021 and approved by Delingha Emergency Management Bureau for trial production, but it has not been officially put into operation. The target company’s phase II production line with an annual output of 4000 tons of lithium hexafluorophosphate is still under construction.
Tianyu Eco-Environment Co.Ltd(603717) said that the target company has obtained the approval for the trial production of “lithium hexafluorophosphate”, but the formal production license is being handled, so there is a risk that the formal production time of the product is uncertain; At present, the target company is in a loss state, is still in the trial production stage, has not been officially put into operation, and the operating income is low.
According to the financial report data, by the end of 2021, Qinghai juzhiyuan had total assets of 882 million yuan and net assets of 91.35001 million yuan. In 2020 and 2021, it realized operating revenue of 0 yuan and 3.8177 million yuan respectively, and net profit of -4.6747 million yuan and -28.0451 million yuan respectively. According to the terms of performance bet, the audited net profit of Qinghai juzhiyuan from 2022 to 2024 shall not be less than 300 million yuan, 400 million yuan and 500 million yuan respectively.
It is worth noting that Tianyu Eco-Environment Co.Ltd(603717) itself does not have the equipment, technology and intellectual property rights to produce “lithium hexafluorophosphate”. At the same time, due to the full pledge of the equity of the target company, this transaction is used to guarantee the RMB 100 million loan entrusted by Qinghai Qaidam circular economy Experimental Zone Qingyin small and medium-sized enterprise development fund (limited partnership) to the target company through Haixi Mongolian and Tibetan Autonomous Prefecture Branch of Qinghai Bank Co., Ltd., but there may be a risk that the transfer of ownership cannot be carried out smoothly or the transfer progress is slow.
Around the capital increase acquisition, Tianyu Eco-Environment Co.Ltd(603717) has entrusted an accounting firm to conduct financial audit and jointly conduct asset evaluation. It is expected to be completed in mid March 2022. Tianyu Eco-Environment Co.Ltd(603717) said that the transaction may form a large amount of goodwill for the company, which is subject to the results of audit and evaluation by a third-party institution.
