On the evening of June 24, Shanshan shares issued an external investment reminder announcement that the company intends to purchase 11.83% of Altura Mining Limited ("Altura") at a price of about 120 million yuan. A few days ago, this share transfer has been completed. Registration of transfers.
The announcement shows that Shanshan shares through its wholly-owned subsidiary Yongshan International Co., Ltd. and Furui Holdings Co., Ltd. signed a "share sale agreement". Yongshan International intends to distribute A $ 0.10 per share for a total price of A $ 25,136,124.90, equivalent to approximately RMB The price of 120,248,707.91 yuan was transferred to all 251,361,249 shares of Altura held by Furui Holdings, accounting for 11.83% of its issued shares.
The investment target company Altura is a company listed on the Australian Stock Exchange engaged in lithium mine project operation. The Pilgangoora project with 100% ownership is a world-class hard rock lithium mine project located in the Pilbara region in western Australia. After the completion of the investment transaction, the company's lithium battery cathode material business will reduce production costs and operating risks.
Acquisition should deal with high cost of cathode materials
In 2018, shipments of smartphones, tablets and laptops continued to decline for many years, and many companies' gross profit margins for their cathode materials business fell. Although the consumer electronics market has been saturated, leading to increased competition in the lithium battery industry, the lithium battery industry is still the company's new energy business performance growth point.
Among them, Shanshan Co., Ltd. is the only lithium battery material manufacturer in China that covers three major lithium battery materials: positive electrode, negative electrode and electrolyte. According to Shanshan's 2018 annual report, the company's revenue growth during the reporting period was mainly due to positive growth in the lithium battery materials business, which achieved revenue of 7.05 billion yuan, an increase of 16.06% year-on-year, of which the positive electrode material, negative electrode material and electrolyte were Realized revenue of 46.64, 19.38, and 403 million yuan, and operating income increased by 9.49%, 30.74%, and 37.10% year-on-year respectively.
While the operating income is stable and improving, in addition to a slight increase of 0.07 percentage points in the gross profit margin of the electrolyte business, the gross profit margins of positive electrode materials and negative electrode materials have decreased by 7.54% and 2.78% respectively compared with the previous year. At the same time, the operating cost ratio of the lithium battery material business Increased by 25% in the previous year. According to the previous annual report cost analysis table, in Shanshan's lithium battery material business, the cost of raw materials alone was as high as 46.806 million yuan, accounting for 81.74% of the total cost, of which the cost of raw materials for cathode materials was 3.5942 million yuan.
Faced with the high cost of cathode materials, Shanshan Co., Ltd. used the acquisition of equity in Australian raw materials companies to solve the problem. Altura, the subject company of the transaction, has exploration rights and mining rights for the Pilgangoora project's hard rock lithium mine located in the Pilbara region of Western Australia (the current mining right expires on August 25, 2037). In the announcement, Shanshan Co., Ltd. believes that the project has great potential for lithium ore development, and its spodumene mining technology is very mature, which can meet the demand for power batteries, high mining purity, and meet the material consistency requirements of automotive power batteries.
Controlling the source of raw materials to reduce costs is also the approach adopted by other domestic companies. Another leading lithium battery company, Ganfeng Lithium, signed an agreement with Pilbara Minerals Limited as early as April 2018, and has the rights to sell some of the spodumene concentrate of the Pilgangoora lithium mine project, which is expected to be the company in 2019. Provides about 160,000 tons of lithium concentrate.