Funeng Technology Receives 26.65 Million Funds to Support the Development of Fast Charging Battery Technology for Electric Vehicles

Recently, the United States Advanced Battery Alliance ('USABC') announced that it has awarded Funeng Technology a $4.1 million (approximately RMB 26.65 million) technology development contract for low-cost fast-charging battery technology projects for electric vehicles. The goal of the project is to develop the LC/FC lithium-ion battery technology through the development of advanced positive and negative materials, electrolyte formulations, and optimized design of the battery. It is reported that USABC is a subsidiary of the American Automotive Research Council ('USCAR') and a cooperative organization of Fiat Chrysler, Ford Motor and General Motors. Supported by the cooperation agreement reached with the US Department of Energy (DOE), USABC’s mission is to develop advanced electrochemical technologies to support the widespread commercialization of new energy vehicle applications. According to official data, Funeng Technology was established in Ganzhou, Jiangxi in 2009 and listed on the Science and Technology Innovation Board in 2020. It is the world's leading soft-pack lithium battery company, ranking first in domestic market share, and second only to LG Chem and AESC in international scope. In 2020, Funeng Technology's installed capacity of equipment has reached 21GWh, and the global production capacity is still being further expanded. Since its establishment, Funeng Technology has attached great importance to the research and development of core technologies. The company's 2020 annual report shows that the company's total Ru0026D investment last year was 372 million yuan, a year-on-year increase of 37.31%, and the proportion of operating income increased from 12.99% in 2019 to 33.21%. In 2020, the two core technologies of 'high specific capacity cathode material technology' and 'power lithium-ion battery separator and its preparation technology' have been combined with the company's lithium-ion power battery products to enter the trial production stage. Up to now, Funeng Technology has realized the industrialization of 285Wh/Kg soft-pack lithium-ion power battery. After the market on April 1, Funeng Technology announced the progress of new technology research and development. The company's Ru0026D team has developed and verified the next-generation electric vehicle battery with an energy density of 330Wh/kg; this technology can still provide at minus 20°C 90% of the capacity can be used worldwide. Continuous breakthroughs in Ru0026D technology also bring continuous vitality to the development of the enterprise. On January 18, Funeng Technology announced on its official website that Funeng Technology and Brilliance Xinri New Energy Automobile Co., Ltd. recently signed a strategic cooperation agreement. Both parties will complement each other’s advantages. , Develop together, continue to maintain the leading position in the industry, and achieve strategic win-win results. On January 28 this year, Funeng Technology’s second largest shareholder, Shenzhen Anyan Investment Partnership, which accounted for 19.1%, had a business change and introduced a new shareholder, Chongqing Jianghehui Enterprise Management Co., Ltd. (accounting for 13.33%) , The latter’s legal representative is Xu Zhihao, who is the head of Geely Technology Group. Chongqing Jianghehui is a wholly-owned subsidiary of Geely Maijie Investment Co., Ltd. Geely Maijie is 100% controlled by Geely Technology Group. As a result, Geely Technology Group has realized indirect access to Funeng Technology. On the evening of April 12, Funeng Technology issued an announcement stating that the company had recently received a notice from GAC Mitsubishi LE model project that Funeng Technology will develop and supply power batteries for LE models for GAC Mitsubishi, with a supply cycle of 5 years. According to the demand plan, Funeng Technology will be mass-produced and supplied by the end of this year. The fixed point of this model marks Funeng Technology's entry into the Japanese supply chain, which is conducive to Funeng Technology's business layout and sustainable development. According to Northeast Securities analysis, Funeng Technology will continue to maintain a deterministic and high growth when it is accumulating, with an excellent layout of domestic customers, and large overseas orders such as Mercedes-Benz are imminent. Taking into account the acceleration of the company's expansion and high amortization and other expenses, it is estimated that the company's net profit attributable to the parent will be -260 million yuan/450 million yuan in 2021-2022.