Zhihang New Energy and Lixiang Power signed a large battery order with a total value of more than 800 million yuan

Recently, Zhejiang Youfu High-tech Fiber Co., Ltd. (hereinafter referred to as '*ST Youfu' or the 'Company') issued an announcement stating that Jiangsu Zhihang New Energy Co., Ltd., a wholly-owned subsidiary of the company (hereinafter referred to as 'Zhihang New Energy Co., Ltd.' Energy”) and Henan Lixiang Power Technology Co., Ltd. (hereinafter referred to as “Lixiang Power”) signed a strategic cooperation agreement and product sales framework contract on January 15, 2019.

The announcement shows that Zhihang New Energy and Lithium Power intend to carry out various forms of cooperation to promote the two parties to jointly create a highly competitive industry in the new energy industry. In addition, the contract stipulates that Lixiang Power will purchase at least 100 million ternary lithium-ion ISR18650 batteries from Zhihang New Energy before December 31, 2019. The recent domestic market price of ternary lithium-ion ISR18650 batteries is about 8.2-8.8 yuan/piece (tax included), and the total contract value exceeds 800 million yuan.

Zhihang New Energy is a wholly-owned subsidiary of Yufu Co., Ltd., with a registered capital of 115 million yuan. It has experienced market tempering and rapid development in recent years. The company has a daily production capacity of 1 million high specific energy and power lithium batteries above 2600mAh, and a PACK production capacity with an annual output of 2.4 million KWh battery systems. A wholly-owned subsidiary, Jiangsu Dongxun Lithium Industry Co., Ltd., mainly produces lithium nickel cobalt manganese oxide as cathode material for lithium-ion batteries, which is used in power-type lithium batteries, with an annual production capacity of 10,000 tons of lithium battery cathode materials. This indicates that the company has formed an industrial chain layout from lithium battery cathode materials-lithium batteries-battery packs.

＊ST Youfu said that in 2018, Zhihang New Energy was affected by the sharp reduction of national new energy vehicle subsidies, unsaturated orders and tight funding, and the operating rate was insufficient and financial Expenses increased sharply, leading to a sharp drop in its income and losses. As of September 30, 2018, Zhihang New Energy's operating income was approximately RMB 230 million. The signing of this contract is conducive to enhancing the competitiveness of Zhihang New Energy in the new energy industry. If it can be implemented as expected in the contract, it will help Zhihang New Energy resume its operating rate and will significantly improve the operating performance of Zhihang New Energy. In turn, it will have a positive impact on the company's financial status and operating results this year.

It is reported that Lithian Power was established on February 10, 2014. It is a high-tech enterprise specializing in the research and development, production, sales and service of lithium battery system technology. Relying on the lithium battery system industry chain with independent intellectual property rights, the first flexible connection patent technology, the on-board comprehensive performance data acquisition system and the ground comprehensive simulation test platform, it provides lithium battery system solutions for various fields, covering electric vehicle power lithium battery power supply systems, energy storage Lithium battery power system and other fields.