Smarter Energy: Corporate Bonds Approved by CSRC Again, Driving Development of the Leader in Lithium

    On October 10, Far East Smarter Energy Co., Ltd. (Stock code: 600869) was examined and approved by China Securities Regulatory Commission (CSRC) again to issue at most 0.46 billion yuan corporate bonds after it was approved to issue 1.3 billion yuan corporate bonds on February 26.

    By analyzing the announcements of Smarter Energy at earlier stage, it is found that Smarter Energy has carried out a series of capital operation since 2015: in November, 2015, it spent 1.2 billion yuan in the buyout of Far East First New Energy Co., Ltd., a leading enterprise of Tesla lithium battery, officially entering the industry chain of new energy automobile and actively marching into the stored energy business; in January, 2016, it invested 55 million yuan to participate in the founding of Far East Integration Technology Co., Ltd., which consolidates the corporation’s strategy of internet of energy and forges a systematic integration platform that integrates the development, construction, operation and maintenance, and trade of new energy power station; in January and June of 2016, it successively increased a total of 0.25 billion yuan investment in Far East First New Energy Co., Ltd. to further strengthen its capacity of 18650 lithium-ion power battery and promote its market share and overall strength. Smarter Energy has formed a profit model of whole industry chain of “planning and design-supply of products-construction and installation-monitoring of operation and maintenance-energy efficiency management-package service” through the capital operation in recent years.

    It is worth mentioning that Far East First New Energy Co., Ltd., the leading enterprise of Tesla lithium battery that Smarter Energy acquired at the end of 2015, has maintained rapid growth. According to the corporation's semiannual report, the net profit net of non-recurring gains and losses attributable to the parent company is 0.19 billion yuan, an increase of 67% over last year, with the net profit of lithium battery business of Far East First New Energy Co., Ltd. increasing 193.46% over last year, which shows favorable synergy and growth state. As the data shows, Far East First New Energy Co., Ltd. is a new high-tech enterprise specialized in the R&D, producing and sales of lithium-ion battery, whose daily output of 18650 lithium-ion battery is 1,000,000. It has become China’s largest 18650 lithium-ion battery producer with its scale ranking only after Panasonic in Japan and Samsung in Korea, the world’s top lithium-ion battery producers. Now Far East First New Energy Co., Ltd. has achieved batch production cooperation with well-known enterprises like Zotye, Leyte, KAMA, Shaanxi Automobile, GM and JMC, of which the domestic scale of Zotye new energy automobile ranks only second to BYD among all the domestic self-owned brands and Jiangling Group ranks the fifth among China's commercial vehicle enterprises with its share in China’s commercial vehicle market reaching 6.83%.  

    It is said that Smarter Energy will continue its strategy in new energy service eco-system and pay equal attention to the development of advanced technologies of high performance and high energy density and large-scale modern enterprise. It focuses on the following three directions: power system of new energy automobile, new energy service system and energy storage system with high potential and cost performance to gradually become the big platform of energy interconnection and IoT of energy by collaborating with previous business.

    According to the calculation of GF Securities Co., Ltd., the compound annual growth rate of lithium-ion battery industry will be about 25% and it will develop rapidly for a long time.