Tianyu Eco-Environment Co.Ltd(603717) announced on February 22 that in order to realize its own strategic layout and improve its sustainable profitability, the company plans to increase capital of Qinghai juzhiyuan new materials Co., Ltd. with cash of no more than 610 million yuan for its capacity improvement and business development. After the capital increase, the company will hold 51% of the equity of Qinghai juzhiyuan to achieve the purpose of holding shares.
According to the data, Qinghai juzhiyuan was established on January 7, 2016 with a registered capital of 150 million yuan. Its legal representative is Liu Bingsheng. Its domicile is located at No. 5, Dega Road, Delingha City, Haixi Prefecture, Qinghai Province. Its business scope includes the R & D, production and sales of lithium hexafluorophosphate, lithium battery anode and cathode materials and lithium battery ternary materials. By the end of 2021, it had total assets of 882 million yuan and net assets of 91.35001 million yuan. In 2020 and 2021, it achieved operating income of 0 yuan and 3.8177 million yuan respectively, and net profit of -4.6747 million yuan and -28.0451 million yuan respectively.
It is reported that the current product of Qinghai juzhiyuan is “lithium hexafluorophosphate”, which is widely used in the manufacturing field of high-performance lithium batteries. It has 10 independent intellectual property rights (patents) for the production of related products, and another 11 patents are under application, totaling 21. The 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 (reply No.: chaiguan [2021] No. 28), 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 has obtained the approval of trial production from Delingha Emergency Management Bureau (Document No.: dzyz [2021] No. 177), which has not been officially put into operation. The phase II production line with an annual output of 4000 tons of lithium hexafluorophosphate is still under construction.
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.
Tianyu Eco-Environment Co.Ltd(603717) said that at present, the company has reached a preliminary intention (core business terms) with the target company, but this transaction still needs to be audited and evaluated by a third party, and the formal equity investment agreement shall be signed after being deliberated by the board of directors and the general meeting of shareholders (contingent) in accordance with relevant laws, regulations and the articles of association, The final implementation and the specific progress of implementation are uncertain. At the same time, the equity of the subject company is fully pledged, which may lead to the risk that the transfer of ownership cannot be carried out smoothly or the transfer progress is slow. In addition, this transaction may form a large amount of goodwill to the company.
The company also suggested that it does not have the equipment, technology and intellectual property rights to produce “lithium hexafluorophosphate”. The target company’s products are greatly affected by the supply-demand relationship between upstream and downstream industries, and there is a risk of product price fluctuation; Although the product “lithium hexafluorophosphate” has been approved for trial production, the formal production license is being handled, and there is a risk that the formal production time of the product is uncertain; At present, the company is in a state of loss, is still in the trial production stage, has not been officially put into operation, and the operating income is low, so there is a risk that the profit is less than expected; In the course of operation, the target company may also face risks in terms of policy restrictions and technology iteration. If the business development of the target company does not reach the expected level, it will face the risk of loss in this transaction.
