CATL Expanding From Power Batteries to the Field of Investment

Credit: CATL

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BEIJING, Aug 16 (TiPost) —— CATL, known as the "Battery King" in China, has announced a joint venture with COMAC and Shanghai Jiaoda University Enterprise Development Group Co. to establish an airline company, officially foraying into the area of electric airplanes.

After collecting nearly nine years of financial reports and prospectus data, Ti Post found that CATL"s foreign investment (cash flow outflow) totaled up to 2018.89 billion yuan.

Combing the investment path and logic of CATL, there are three main ways for the company to conduct investment. The first is to invest as the listed company CATL. The second is to invest as the wholly-owned subsidiaries of CATL, such as CATL New Energy Industry Investment Company Limited. The third is the private equity funds funded by CATL and its subsidiaries in the name of LP (limited partner).

In May this year, Xiamen Puquan private fund management partnership (limited partnership) was established, and the LP behind the Puquan private equity is CATL"s new energy industry investment limited, holding 45%.

CATL has participated in a total of 11 funds so far. In addition to the above-mentioned CATL New Energy Industry Investment Limited Company, another LP is CATL New Energy Science and Technology established in December 2011.

A new energy investor told Ti Post that the investment logic of industrial capital is to ensure the security of their supply chain.

Through equity holdings in a large number of satellite companies, CATL has reached the upstream and downstream of the whole industry and established a self-centered industrial empire.

The above investor also said that there was once a stereotype in the industry that although industrial capital has more money, it can"t compete with professional VCs, but now it seems that industrial capital has its strength and act very fast.

For the invested enterprises, with the powerful endorsement of the big manufacturers, it"s helpful for them to finance and expand the market. There are even enterprises that discounted subsequent rounds of financing in the financing process to introduce CATL"s capital.

Sofarsolar conducted a round of capital increase to introduce several professional VC/PE institutions in November 2021, and the post-investment valuation was 10 billion yuan. A month later, Sofarsolar opened another round of financing for CATL"s wholly-owned subsidiary alone, but the post-investment valuation dropped to 7.7 billion yuan.

CATL announced on June 20 this year that it had cooperated with the Bolivian government to develop lithium resources in the country"s salt lake and build two lithium salt processing plants. After these two lithium salt processing plants go into operation, the total capacity will be about 200,000 tons per year.

The earliest investment of CATL in lithium mining above is on March 14, 2018. After this, CATL began to expand its reach to power battery raw material minerals around the world.

CATL signed a subscription agreement with Australia-listed Pilbara through its wholly-owned subsidiary Contemporary Amperex Technology (Hong Kong) Limited on September 4, 2019. CATL announced that it intended to invest in the construction of a new lithium battery production and manufacturing base (Yichun) project in Yichun City, Jiangxi Province in September 2021, with a total investment of no more than CNY13.5 billion and a construction period of no more than 30 weeks. In the same month, CATL purchased partial stakes in Millennial, a lithium miner in Vancouver, Canada, and Manono, a lithium mine in Africa, for C$377 million (US$298 million) and US$240 million (approximately RMB 1,552 million), respectively.

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