Storage & Semiconductor report! A listed company lithium battery factory stop production!

On October 10, Baolixin announced that Inner Mongolia lithium battery production base was temporarily suspended. This is the second time this year that the production base has stopped production.

The production base temporarily suspended is Baolixin (Inner Mongolia) Battery Co., LTD., a wholly-owned subsidiary of Baolixin, located in Tumet Zuoqijinshan Development Zone, Hohhot City, Inner Mongolia Autonomous Region, to undertake the new main battery capacity of Baoli. The performance report for the first half of 2022 shows that the revenue of Baolxin reached 102 million yuan, a year-on-year growth of 19.19%, among which the revenue of Inner Mongolia company was 77 million yuan, accounting for 58.6% of the total revenue.

On February 28 this year, Baoli New previously issued a notice. According to the requirements of the government on epidemic prevention and control, the area of Baoli New Inner Mongolia Battery Company is classified as a medium risk area, and a small number of production staff cannot work normally. The recruitment of offline frontline production staff has also been temporarily suspended due to the epidemic prevention and control requirements. Meanwhile, due to poor logistics and other factors, product supply and raw material purchase may be delayed for a short time, resulting in the production and operation of Inner Mongolia battery production base to a certain extent.

Now, the battery production base in Inner Mongolia is once again facing temporary suspension. Its main wholly-owned subsidiary, Baolixin (Inner Mongolia) Battery Co., LTD., has temporarily suspended work at home in accordance with relevant epidemic control requirements. The company said the temporary suspension is expected to have an adverse impact on the company's operating results in 2022. However, this is not the first time an Inner Mongolia company has temporarily halted production.

Confirmed new said it would force by transfer the orders to other subsidiaries, coordinate each subsidiary inventory to ship the products to meet the part order, appropriate adjustments to the date of delivery and return to work out ways to properly handle the customer orders, and minimize the negative impact of the outbreak of the production and business operation of production preparation in advance, as far as possible to win time, reduce the loss.

Baolixin, formerly known as Tenrevo, can acquire shares of Watma and enter the field of power batteries and new energy vehicles. Once a battery giant, Watma has now gone bankrupt and reorganized as a publicly traded company under the name Baolisin. But the business situation is still not optimistic, successive years of losses.

2021 Baolixin achieved an operating revenue of 164 million yuan, up 16.37% year on year, and net profit of the parent was -133 million yuan, down 21.94% year on year. The main reason for the loss is that the upstream core raw material price of lithium battery continues to rise sharply, but the transmission of battery price to downstream customers lags significantly, resulting in the downstream sales price increase is significantly lower than the raw material. In addition, the production line of the new part of Baoli is backward and the capacity utilization rate is relatively low, which leads to the high production cost. Baolixin also said that in order to maximize profits, the company has taken the initiative to slow down the pace of production and sales, focusing on existing resources in favor of high-quality customers. The overall sales size was relatively small, resulting in high fixed costs.

Statistically, the gross margin for the new lithium-ion battery continues to be negative, with a gross margin of -5.06% in the first half of 2022.

Recently, in response to the inquiry letter of the Shenzhen Stock Exchange, Baolixin said that it had signed a guarantee agreement with a customer in January 2022, to supply 130,000 sets of various lithium battery products to the customer from January to June 2022, and paid a 50% advance payment of 50.53 million yuan in the same month.

By the end of August, 56,000 units of this agreement had been delivered, totaling about 40.65 million yuan (of which 20.325 million yuan was the advance payment for the supply agreement). Baolixin said there was no failure to deliver on time. But a temporary shutdown in Inner Mongolia could affect the supply of customers' orders.

In the first half of this year, Baolixin has signed cooperation agreements with the People's Government of Sanmenxia City, the Administrative Committee of Zaozhuang High-tech Industrial Development Zone, the Administrative Committee of Huangshi Economic and Technological Development Zone, and the People's Government of Tieshan District successively, planning to invest in the construction of 17GWh lithium battery cell and 10GWh PACK capacity projects in the above areas.

Moreover, publicly raised about 250 million yuan to protect new force (Inner Mongolia) battery co., LTD. New batteries production base of energy consumption, and equipment modification and intelligent manufacturing, production environment, also said in the report will speed up power and new energy products prepared with energy storage batteries, hope the energy storage products can been applied in the field of clean energy as soon as possible.

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