Xinwangda plans to invest approximately 12 billion yuan to build a power battery project in Zhuhai, with another round of new growth in thermal conductivity materials

On the evening of March 1st, Xinwangda (300207) announced that its subsidiary Xinwangda Automotive Battery plans to invest in the construction of the "30GWh Power Battery Production Base Project (tentative)" in Zhuhai, with a total planned investment of approximately 12 billion yuan. Xinwangda Automotive Battery also signed a project investment agreement with the Zhuhai Municipal Government.

According to the announcement, the Zhuhai Municipal Government has identified the power battery industry as a key development industry in the local area, providing relevant policy support and comprehensive supporting services for the settlement of the Xinwangda production project. It plans to provide approximately 800 acres of planned land for the contiguous project. Xinwangda will establish a project company in Zhuhai with a registered capital of 3 billion yuan.

At the same time, Xinwangda also announced that its automotive batteries have received a designated notice from SAIC Group to supply power for the ZS12MCE HEV projectThermal conductive silicone for batteriesAssembly products. According to the semi annual report, Xinwangda added 15 new car models to the announcement directory in the first half of 2021, and received designated letters for multiple car model projects from car companies such as Dongfeng Liuqi Lingzhi CM5EV, Dongfeng E70, GAC A9E, Geely PMA platform, Geely GHS2.0 platform, and SAIC GM Wuling Hongguang MINI.

Xinwangda Automotive Battery, which carries the power battery business, has just completed a round of capital increase. According to the company's announcement on February 24th, Harmony Haihe, Chehejia Sky Top、 19 investors, including Weirui Investment and Xunxing Investment, invested a total of 2.43 billion yuan to acquire approximately 19.5% of the equity of Xinwangda Automotive Battery. According to public information, the legal representative of Chehejia is Shen Yanan, co-founder and CEO of Ideal Automobile, while NIO Investment belongs to the NIO family. The two companies have increased their capital by 400 million yuan and 250 million yuan respectively, with a shareholding ratio of 3.21% and 2.01%. In addition, well-known enterprises such as SAIC Jinshi, Huayou Holdings, and Shenzhen Venture Capital also participated in the investment.

However, Xinwangda AutomobileThermal insulation material for batteriesStill in a loss making state. The announcement shows that the company's revenue for the first three quarters of 2020 and 2021 was 475 million yuan and 1.542 billion yuan, respectively, with net losses of 324 million yuan and 254 million yuan, respectively.

According to data from the China Automotive Power Battery Industry Innovation Alliance, the market share of CATL's power batteries remains at over half of the total market share. In 2021, the Xinwangda's installed capacity was 2.06GWh, with a market share of 1.3%; In January of this year, the loading volume was 0.23GWh, and the market share increased to 1.41%. The domestic ranking also rose from tenth to eighth.

To cope with the upcoming market competition, Xinwangda is preparing for a significant expansion of production. In August 2021, Xinwangda announced plans to invest 20 billion yuan in the construction of a 50GWh power battery production base project in Nanchang Economic Development Zone; In December, another 20 billion yuan plan was launched to invest in the construction of a 30GWh power battery and energy storage battery production line in Zaozhuang, Shandong. In addition, Xinwangda has production bases of 4GWh and 30GWh in Huizhou, Guangdong and Nanjing, Jiangsu, respectively. With the addition of the 30GWh project under construction, it is expected that Xinwangda's production capacity will reach 144GWh by 2025.

Xinwangda originally focused on the production of consumer electronics batteries, but in recent years, it has entered the field of power batteries driven by the new energy vehicle market. According to the 2021 semi annual report, the mobile digital and laptop categories still contributed the main revenue, while the automotive and power battery business accounted for about 36.6% of the total revenue, but the gross profit margin was only 6.67%, far lower than the gross profit margins of 19.08% and 11.34% of the previous two categories.

Xinwangda's overall performance is strong, with financial reports showing that the company's revenue for the first three quarters of 2021 was 25.584 billion yuan, a year-on-year increase of 25.02%; The net profit attributable to the parent company was 669 million yuan, a year-on-year increase of 41.75%.

However, investing in a power battery production line requires a significant amount of capital, which puts debt pressure on Xinwangda. In the first three quarters of 2021, the company used 2.313 billion yuan in cash to construct fixed assets, intangible assets, and other long-term assets, with an asset liability ratio of 74.79%. Cash used to pay interest payments was 399 million yuan, accounting for 59.64% of the current net profit attributable to shareholders.

Organic silicon series thermal conductive materialsIt is prepared mainly from organic silicon resin and added with fillers with excellent heat resistance and thermal conductivity. It has low oil separation, high and low temperature resistance, water resistance, ozone resistance, and good weather resistance.

In terms of form, thermal conductive silicone grease is in the form of a grease paste, which can freely fill the space that needs to be filled. The thermal conductive gel is in the gelled state between the solid and the liquid, and can also fill the gap freely. And the thermal pad is a solid self-adhesive product.

Product features and applications:

Multiple thermal conductivity options to meet different thermal conductivity requirements.

Good electrical insulation.

The application method is flexible, concise, and convenient.

Mature technology, reliable performance, and long lifespan

Professional heat dissipation design (simulation and testing capabilities)

● Applied to IT, communication, lighting, medical, military new energy vehicles, etc