Exits Wind Power Project, Bids for Lithium Sulfide Company, Shanghai Xiba Expands Solid-State Battery Business

Shanghai Xiba will further control investments in businesses that are less directly related to specialty chemicals and solid-state battery-related businesses, and will specifically strengthen the allocation of resources such as funding and teams for technology research and development, production line construction, and business expansion in specialty chemicals for water treatment, advanced materials for solid-state batteries, and related businesses.

Image/Shanghai Xiba

On July 22, Shanghai Xiba (603200) announced that it plans to make a proportional capital increase in its associate company, Hainan Shenneng New Energy Co., Ltd. (referred to as "Hainan Shenneng"), in order to address its operating capital shortfall.

After the capital increase is completed, Hainan Shenneng's registered capital will increase from 200 million yuan to 2.946 billion yuan, with no change in the shareholders' equity proportions. During the capital increase process, Shanghai Xiba does not plan to make an actual capital contribution to Hainan Shenneng.

According to the information, Hainan Shenneng was established in April 2022 as a project company jointly formed by three listed companies: Shenergy Co., Ltd. (600642), Shanghai Xiba, and Shanghai Electric Wind Power Group Co., Ltd. (688660). The company aims to invest in the development, manufacturing, construction, and operation of offshore wind farms and supporting low-carbon industrial park projects in Hainan Province.

In recent years, Shanghai Xiba has further improved its business development strategy, focusing on excelling in its core business of specialty chemicals for water treatment while vigorously expanding its advanced materials business for lithium-ion solid-state batteries.

Accordingly, Shanghai XiBa is further controlling investments in businesses that are less directly related to the specialized chemicals and solid-state battery-related businesses, while specifically strengthening the allocation of funds, teams, and other resources towards the technological research and development, production line construction, and business expansion of water treatment specialized chemicals, advanced materials for solid-state batteries, and related businesses.

To further strengthen strategic focus, improve the business layout of Shanghai Xiba, and alleviate financial pressure, based on the friendly consensus reached among all shareholders of the project company, Shanghai Xiba and Electric Wind Power will timely exit Hainan Shenneng through a "zero consideration" targeted capital reduction after completing the aforementioned capital increase procedures. Upon completion of the capital reduction, the registered capital of Hainan Shenneng will be reduced from RMB 2,946,186,000 to RMB 2,504,258,100.

Battery Network noted that on July 7, Shanghai Xiba announced that the company plans to participate, within the scope of the board of directors' decision, in the bidding for the lithium sulfide business-related assets of Youyan Rare Earth New Materials Co., Ltd. (hereinafter referred to as "Youyan Rare Earth"), which are publicly listed for transfer.

The announcement shows that GY Rare Earth is a holding subsidiary of GY New Materials (600206). On June 25, GY New Materials disclosed a related announcement stating that its holding subsidiary GY Rare Earth intends to transfer assets related to the lithium sulfide business through listing on the property rights exchange. Lithium sulfide material is a new product independently developed by GY Rare Earth, mainly used as a raw material for producing sulfide solid-state electrolytes, and has already achieved small-batch sales.

Regarding this auction for lithium sulfide-related assets of Grirem Advanced Materials, Shanghai Xiba stated that it will help strengthen the company's development in the new energy sub-sector and is in line with the company's strategic development plan.