On the evening of October 27, 2022, Zhongke Electric, a new lithium battery cathode tycoon, announced that the company plans to invest in the construction of an integrated project with an annual output of 100000 tons of lithium battery cathode materials in Lanzhou New Area, Gansu Province. The investment in fixed assets of the project is about 2.5 billion yuan. The annual capacity of cathode materials is 100000 tons, and the construction period will not exceed 36 months. The above project will build an integrated production base for lithium battery cathode materials with an annual output of 100000 tons, which will be invested by a joint venture to be jointly established by Zhongke Xingcheng Technology, a wholly-owned subsidiary of Zhongke Electric, and Chongqing Ferdi, a wholly-owned subsidiary of BYD.

In September 2022, Zhongke Electric announced that Zhongke Xingcheng Technology and Chongqing Ferdi had determined a strategic partnership and established a joint venture. The registered capital of the joint venture is 1 billion yuan, including 650 million yuan subscribed by Zhongke Xingcheng Technology or its holding subsidiaries, and 350 million yuan subscribed by Chongqing Ferdi or its holding subsidiaries. At that time, the announcement showed that the joint venture would focus on the manufacture of anode materials, invest in the construction of a 100000 ton lithium ion anode material project, and give priority to the supply of BYD.

Zhongke Electric said that this investment project is an important part of the company's capacity layout, which is conducive to deepening the company's cooperation with BYD, expanding the company's lithium battery cathode business scale, meeting the growing lithium battery cathode market demand, enhancing the company's comprehensive competitiveness, and improving the market share of the company's cathode materials.

Accelerated expansion of negative electrode capacity

According to the data, Zhongke Electric was founded in 2004. Its lithium battery cathode business was operated and sold by its holding subsidiary, Zhongke Xingcheng. Its main products are lithium ion battery cathode materials, which are mainly used in power, consumer, energy storage lithium ion batteries and other fields. It is worth mentioning that in addition to BYD, Zhongke Electric has previously established joint venture subsidiaries with Yiwei Lithium Energy and Ningde Times respectively, and the shareholders enjoy the right of first refusal.

In February 2022, Zhongke Electric announced that it plans to jointly invest and build the "100000 t/a lithium battery cathode material integration project" with Ningde Times. After the project is completed and put into operation, the supply of graphitized cathode products in Ningde era will be given priority. At the same time, Ningde Times and Zhongke Xingcheng Holdings jointly invested in Zhongke Xingcheng in Gui'an New Area.

In October 2021, Zhongke Electric announced that it planned to establish a joint venture with Yiwei Lithium Energy to invest in a project with an annual output of 100000 tons of cathode materials, and Yiwei Lithium Energy held 40% of the shares. The joint venture company focuses on the manufacture of anode materials, and gives priority to supply to Yiwei Lithium Energy and its subsidiaries. In addition, since 2022, Zhongke Electric has been accelerating the construction of negative electrode capacity. In January, it announced that it planned to invest 510 million yuan in the Wangjiang Economic Development Zone, Anhui Province, to build a "100000 ton/year production base of negative electrode material powder" project, and build it into the company's negative electrode material raw material supply and production and processing base.

In March, Zhongke Electric announced that it planned to raise 1.711 billion yuan to increase its capital in Hunan Zhongke Xingcheng and Guizhou Zhongke Xingcheng to ensure the implementation of the "production base with an annual output of 50000 tons of lithium battery cathode materials" and the "construction project with an annual output of 30000 tons of lithium battery cathode materials and 45000 tons of graphitization processing". In May, Zhongke Electric announced that it planned to invest 2.5 billion yuan in Sichuan Ganmei Industrial Park to build an integrated project with an annual output of 100000 tons of lithium battery cathode materials. The capacity of Phase I and Phase II is 50000 tons/year respectively. Net profit in the first three quarters increased by 69.99% year on year

On the same day of disclosing the progress of cooperation with BYD, Zhongke Electric released the third quarter report of 2022. In the first three quarters of 2022, Zhongke Electric realized an operating revenue of 3.745 billion yuan, a year-on-year increase of 169.81%, and a net profit of 464 million yuan after deducting non profits, a year-on-year increase of 88.97%. In the third quarter, Zhongke Electric achieved an operating revenue of 1.712 billion yuan, a year-on-year increase of 202.91%, and a net profit of 180 million yuan after deducting non profits, a year-on-year increase of 102.71%.Editor/Xing Wentao