Qianjiang Motorcycle 4 Billion Wh Lithium Battery Project Terminated

- Mar 22, 2020-

Qianjiang Motorcycle 4 Billion Wh Lithium Battery Project Terminated

  On the evening of December 5, Qianjiang Motorcycle issued an announcement on the holding company's signing of the "Cancel Contract Agreement" to stop Zhejiang Qianjiang New Energy's 4 billion Wh lithium-ion power and energy storage battery assembly project.

  Qianjiang New Energy's large investment started in 2018. At that time, Qianjiang Motor Holding Co., Ltd. Zhejiang Qianjiang New Energy Company and Wenling Municipal Government signed an agreement to plan to implement a 4 billion Wh lithium ion power and energy storage battery assembly project in Zhejiang Qianjiang New Energy, with a total investment of about 3.18 billion yuan. . As soon as the announcement came out, the investment abortion was officially announced.

  Qianjiang Motorcycle believes that as of now, due to changes in the lithium battery industry and other factors, new energy companies have failed to advance as scheduled and the project is in a stagnation state.

  At present, the lithium battery industry has undergone significant changes, and the main market shares are concentrated in several leading companies. Therefore, Qianjiang Motor Holding Company's choice to stop investing in lithium battery projects is a rational choice. Due to the decision of the holding company and the Wenling Municipal Government to stop the project and sign the agreement to terminate the contract, Qianjiang Motorcycle is expected to affect the company's current pre-tax profit of approximately -27.32 million yuan.

  If this impact is placed in the first two years, it will have an important impact on the operating performance of Qianjiang Motorcycle. Qianjiang Motor's net profit in 2017 and 2018 was 82.74 million yuan and 63.35 million yuan, respectively.

   However, since 2019, due to the movement of many assets, the company's net profit in the first three quarters has reached 300 million yuan. These tenements include the transfer of 39% equity of Zhejiang Qianjiang Robot Co., Ltd. and an increase of 90 million yuan in profit; Zhejiang Yipeng Engine Parts Co., Ltd., a wholly-owned subsidiary, recognized revenue of approximately 89 million yuan in transfer of land use rights; Wuxi Weisai Semiconductor Co., Ltd. The company cancelled and confirmed the income of about 8.6 million yuan.

   It can be seen that the choice of "demolition" at the end of 2019 will not have an excessive impact on Qianjiang Motor's performance this year