Guoxuan Hi-Tech invests another 11.5 billion to build a power battery project with a target production capacity of 300GWh in 2025

Recently, Guoxuan Hi-Tech issued two announcements stating that it plans to build new power battery projects in Hefei, Anhui and Liuzhou, Guangxi, with a total investment of 11.5 billion yuan.

Image source: Screenshot of Guoxuan Hi-Tech announcement

Specifically, Guoxuan Hi-Tech plans to invest in the construction of Guoxuan New Station's ternary lithium-ion power battery production line and supporting systems with an annual output of 20GWh in Hefei Xinzhan High-tech Zone, with a total investment of approximately 6.7 billion yuan and a fixed asset investment of approximately 4.6 billion yuan. The project is implemented by Hefei Battery Technology, a wholly-owned subsidiary. The project plans to provide world-leading high-endurance batteries for mid- to high-end models of internationally renowned car companies. The construction period is 16 months.

Guoxuan High-tech stated that this investment will help the company better seize the opportunities in the power battery market, further expand the ternary battery production capacity, enrich the product structure, improve the company's production capacity layout, enhance the company's comprehensive competitiveness, and meet the company's future business development. As well as the needs of market expansion, it is in line with the company's strategic development plan.

Image source: Screenshot of Guoxuan Hi-Tech announcement

In addition, Guoxuan High-Tech also plans to invest in the construction of a 10GWh lithium iron phosphate lithium-ion power battery production line and supporting systems in Liuzhou, with a total investment of approximately 4.8 billion yuan and a fixed asset investment of approximately 3.5 billion yuan. The planned land area of ​​the project is about 362 acres, and its holding subsidiary Liuzhou Guoxuan is the implementation entity. This project mainly meets the needs of customers in South China, South Asia, and Southeast Asia. The construction period is 13 months.

Guoxuan Hi-Tech stated that this investment in Liuzhou aims to further develop the new energy power battery market in South China and expand the company's production capacity.

Regarding the source of investment funds, Guoxuan Hi-Tech stated in relevant announcements that the funds come from its own or self-raised funds. He also pointed out that this investment will increase the company's capital expenditure and cash expenditure, but in the long run it will have a positive impact on the company's business layout and operating performance.

In the first three quarters of this year, Guoxuan Hi-Tech achieved operating income of 14.426 billion yuan, a year-on-year increase of 152%; net profit attributable to the parent company was 150 million yuan, a year-on-year increase of 121.40%. Among them, the company achieved operating income of 5.788 billion yuan in the third quarter, a year-on-year increase of 166.33%; the net profit attributable to the parent company was 85.56 million yuan, a year-on-year increase of 355.20%, and a month-on-month increase of 160.61%.

Image source: Guoxuan Hi-Tech 2022 Third Quarter Report

Regarding performance growth, Guoxuan Hi-Tech stated that during the reporting period, the customer structure continued to be optimized. While expanding electric vehicle customers, it accelerated its deployment in the energy storage market; at the same time, the company's global layout continued to improve and the release of production capacity accelerated.

In 2021, Hefei Guoxuan and Great Wall Motors' subsidiary signed the "2022 Procurement Framework Cooperation Agreement". The two parties determined that the total power delivered between 2022 and 2025 will be no less than 10GWh of power batteries.

In April this year, Hefei Guoxuan, a wholly-owned subsidiary of Guoxuan Hi-Tech, signed a cooperation agreement with Geely Commercial Vehicles. The two parties agreed that Hefei Guoxuan will supply power battery products to Geely Commercial Vehicles from 2022 to 2024, with an estimated total volume of 12.6 Thousands of sets.

In addition, Guoxuan Hi-Tech has obtained Volkswagen's official mass production designation, and related products will be used in Volkswagen's largest new energy platform. Moreover, the construction of the Salzgitter, Germany factory jointly built by the two parties started on July 8, with an annual production capacity of 40GWh.

According to SNE Research data, in the first half of 2022, the global installed capacity of power batteries reached 203.4GWh, a year-on-year increase of 76.8%. Among them, Guoxuan Hi-Tech's global installed capacity of power batteries reached 5.8GWh, with a global market share of 2.9%, ranking 8th in the world.

Currently, Guoxuan Hi-Tech has ten major battery production bases in China, including Hefei (Xinzhan, Jingkai, Lujiang), Tongcheng, Nanjing, Qingdao, Tangshan, Nantong, Liuzhou, Yichun and other places. As of June 2022, Guoxuan Hi-Tech's Nanjing New Energy Intelligent Manufacturing 20GWh power battery project has officially been put into production, Yichun Guoxuan's 10GWh power battery project has been completed and put into production, and Guoxuan Kehong's annual 200,000 tons high-end cathode material project has been put into production.

Faced with the rapid development of new energy vehicles, energy storage and other industries, it is not surprising that Guoxuan Hi-Tech has invested in the construction of 30GWh lithium battery production capacity this time. According to the plan, Guoxuan Hi-Tech plans to achieve 300GWh lithium battery production capacity in 2025, of which 100GWh is planned overseas. From this point of view, Guoxuan Hi-Tech will continue to expand its production capacity.