On the evening of July 1, Zijiang Enterprise (600210) announced the application for listing of its holding subsidiary, Shanghai Zijiang New Material Technology Co. After the spin-off, Zijiang Enterprise will remain the controlling shareholder of Zijiang New Materials.
For this IPO, Zijiang New Material intends to publicly issue not more than 19,974,300 shares and raise RMB 411 million, which will be invested in the key equipment intellectualization construction project for lithium battery aluminum plastic film, R&D centre construction project, supplementary working capital and bank loan repayment project.
Zijiang New Material specialises in the research and development and production and sales of aluminium-plastic composite films for soft pack lithium batteries. As one of the leading enterprises in the domestic aluminium-plastic film industry, Zijiang New Material has broken the monopoly pattern of imported products in the aluminium-plastic film market in China. Now, the company has successfully cut into the high-end market share in the 3C digital field and has been expanding its market territory in the power field.
In 2019-2021, the company's technical strength will continue to improve; process equipment will continue to be optimized; and the domestic alternative product line will gradually broaden. In 2021, the sales volume of Zijiang New Material's aluminum plastic film will be 22,189,900 square meters, with a domestic market share of over 10%.
Based on the company's current operations, Zijiang New Material expects operating revenue from January to June 2022 to be RMB295 million to RMB325 million, an increase of approximately 76% to 93% year-on-year; and net profit is expected to be RMB48 million to RMB55 million, an increase of approximately 47% to 68% year-on-year.
Another point of interest for Zijiang New Material is the heavyweight shareholder behind it, BYD (002594), which has two roles as shareholder and customer, supporting the company's IPO.
The prospectus shows that in the second half of 2021, Zijiang New Material introduced BYD and Ningde New Energy as strategic investors in the company through capital increase and share expansion respectively. Up to now, BYD and Ningde New Energy directly hold 3.87% and 2.53% of shares respectively. In addition, Changjiang Chendao and Jiaocheng Shangqi hold 3.74% and 1.88% of the shares.
It should be noted that Ningde New Energy is known as Ningde New Energy Technology Co., Ltd, a wholly owned subsidiary of New Energy Technology Co. According to SkyEye, Ningde New Energy is the world's leading supplier of lithium-ion polymer batteries, specialising in battery materials, cells, packaging and system integration technologies. Although the shareholding structure shows that Ningde New Energy has no direct shareholding relationship with Ningde Times, the business registration data shows that the legal representative of Ningde New Energy was changed from Zeng Yuqun, the head of Ningde Times, to Zuo Yunwen in April 2017.
As the saying goes, "it's good to have a big tree at your back.” BYD is not only a shareholder of Zijiang New Material but also the company's first major customer. During the reporting period, BYD and Ningde New Energy were the company's top two customers. BYD’s supply chain revenue amounts to 116-million-yuan, accounting for 31.59% of the shares while Ningde’s new energy revenue is valued at 54.3949 million yuan, accounting for 14.84%.
In addition to the above-mentioned customers, Zijiang New Material has established stable cooperation relationships with well-known lithium battery manufacturers such as Tianjin Lishen, Penghui Energy and Duoduo.