Total investment of 11 billion yuan! 300014 plans to increase its stake in the energy storage battery sector.

On April 7, EVE Energy (300014) released two investment announcements, laying plans in Heping County, Longyan City, Fujian Province and Qidong City, Jiangsu Province, respectively. In total, it plans to add about 110 GWh of energy storage battery production capacity, with a total investment of about 11 billion yuan, showing that the company is accelerating its expansion in the energy storage battery sector.

According to the announcements, on April 7, EVE Energy’s board of directors approved a resolution to sign relevant agreements with the People’s Government of Heping County and Longjing Environmental Protection (600388). The company plans to sign the《EVE Energy Storage Battery Production Base Project Investment Agreement》with the government of Heping County, and at the same time sign the《Joint Venture Agreement》with Longjing Environmental Protection, jointly investing to establish a joint venture company. In the BaiSha New Materials Sci-Tech Valley in Shanghang, Fujian Province, the project will build an energy storage battery production base with an annual capacity of 60 GWh. The project’s planned total investment is about 6 billion yuan. The announcement discloses that the Finance Bureau of Heping County is the actual controller of Longjing Environmental Protection.

The joint venture company tentatively named “Fujian EVE Energy Storage Co., Ltd.” plans to have a registered capital of up to 900 million yuan. Among them, EVE Energy plans to contribute 720 million yuan in cash, holding 80%; Longjing Environmental Protection plans to contribute 180 million yuan in cash, holding 20%. In the future, should any capital increase be required, the two parties will, in principle, increase capital proportionally according to their respective equity interests. Longjing Environmental Protection’s cumulative capital contribution will not exceed 240 million yuan. After EVE Energy’s cumulative capital contribution reaches 960 million yuan, it will have the right to continue to make a unilateral capital increase.

Starting in 2024, the two parties have built deep coordination in the cell business area. EVE Energy provides in-depth support by fully outputting core cell technologies, production processes, and quality standards for models such as 314Ah, and provides Longjing Environmental Protection with key raw material procurement support. Longjing Environmental Protection is responsible for large-scale production of energy storage cells, forming a division-of-labor collaboration model of “technology output + production and manufacturing + market expansion.” This joint venture will further deepen alignment in areas such as ensuring supply of key raw materials, iterative development of high-capacity cell technology, and sales expansion. Longjing Environmental Protection will open up application scenarios such as new-energy mining dump trucks and mining microgrids to EVE Energy, and jointly provide solutions for green mining scenarios.

On the same day, after partnering with Longjing Environmental Protection to set up in Fujian, EVE Energy also announced that it plans to sign an《Investment Cooperation Agreement》with the People’s Government of Qidong City, Jiangsu Province. It plans to invest in and build a 50 GWh energy storage (power) battery production base in the Qidong Economic Development Zone, with a total investment of about 5 billion yuan and a land area of about 332 mu.

Under the agreement, EVE Energy must, within 30 working days after signing the agreement, newly establish a project company for independent accounting within Qidong’s jurisdiction as the implementation entity. The project is planned to be located in the Qidong Economic Development Zone, north of Yihe River Road and east of Qiantang Jiayuan. The land will be transferred by way of public bidding/auction/listing, and the land status will be delivered. If the parties fail to win the land-use right, the agreement will automatically become null and void, and neither party will be liable to the other. If the land-use right is successfully obtained, after signing the《Investment Development Supervision Agreement》, the Qidong Municipal Bureau of Natural Resources and Planning and the project company will sign the《Contract for the Transfer of the Right to Use State-Owned Construction Land》. The agreement will become effective after it is signed and sealed by both parties and the respective internal approval procedures of each party are completed.

EVE Energy stated that the two investments are beneficial for all parties to give full play to their resources and advantages, seize opportunities in the energy storage and power battery market, further expand production capacity, optimize the industrial structure, and enhance the company’s influence in the new energy sector and its overall competitiveness. This is consistent with the company’s development strategy and the interests of all shareholders.

In terms of risks, the company notes that the land for the Qidong project needs to be obtained through a process such as bidding/auction/listing, and whether it can be obtained and the timing of obtaining it are uncertain. After the two projects are put into construction, due to factors such as changes in the macroeconomy, industry policies, and market environment, there may be risks that construction will not be completed on schedule or that expected returns will not be achieved.

(Editor: Zhang Yan)

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