According to Jiweiwang, on March 1st, Shenzhen Desai Battery Technology Co, Ltd. (securities abbreviation: Desai Battery, securities code: 000049) held its first extraordinary shareholders' meeting in 2022, discussing the "Demonstration and Analysis Report on the Company's Allotment of RMB Ordinary Shares (A-shares) to Original Shareholders" The Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors and its Authorized Persons to Fully Handle the Specific Matters of this Stock Allocation (Revised Draft) and other proposals were reviewed and voted on. As its institutional shareholder, iJiWei participated in this general meeting of shareholders and voted in favor of the relevant proposals.

After the meeting, Aijiwei and Desai Battery executives had a discussion on the company's development situation.

Placing ordinary shares to original shareholders, raising no more than 2.5 billion yuan to increase operating capital

Desai Battery is one of the earliest enterprises in China engaged in lithium battery power management systems and packaging integration. It entered the domestic mobile phone supply chain earlier and gradually expanded its customers to international first tier manufacturers. Smartphones, laptops, wearable devices, power tools, and smart home products are the main application areas of the company's lithium battery products.

In addition, the energy storage business is also an important strategic development area for Desai Battery. In order to seize the development opportunities of the energy storage industry, the company focuses on expanding application scenarios such as base station energy storage, home energy storage, portable energy storage, and UPS data center power supply based on the energy storage battery power management system and packaging integration business. Desai Battery's energy storage business is showing a rapid growth trend, with a revenue of 349 million yuan in 2021, a year-on-year increase of 205.79%.

For the layout of energy storage, Desai Battery executives once told Jiweiwang, "For many years, the company has been focusing on the field of lithium battery power management and packaging business. At this stage, the company is actively expanding its business scope, strengthening its existing business, and further expanding its business in the industry chain, carrying out energy storage cell business, SIP packaging business, and whole machine assembly business. The company is committed to becoming a leading global service provider in the new energy and intelligent control industry.

On the basis of establishing a foothold in the existing industry and further consolidating its position in the industry, Desai Battery will actively promote its international layout in the future, forming a globalized pattern that focuses on domestic layout and combines international layout, and steadily expanding its large-scale power battery power management business. At the same time, seizing the opportunity of rapid development in the energy storage market, relying on the research and development platform of battery cells and system integration, we aim to build the ability to integrate energy storage systems and become a world-class energy storage system solution provider and professional manufacturer.

However, with the continuous expansion of the company's sales scale and business line, Desai Battery continues to grow. In the first three quarters of 2022, the company achieved a revenue of 15.512 billion yuan, an increase of 22.9% compared to the same period last year; With the growth of the company's business, the total assets of the company increased from 8.77 billion yuan at the end of 2019 to 12.223 billion yuan by the end of September 2022.

Therefore, in order to meet the demand for new working capital brought about by the continuous expansion of business scale, and to enhance the company's capital strength, we provide financial support for various business activities. Desai Battery plans to raise a total of no more than 2.5 billion yuan (the specific scale depends on the market situation at the time of issuance), which, after deducting the issuance costs, is intended to be used to supplement working capital and repay loans, supplement the company's working capital, ease liquidity and optimize the asset liability structure, so as to comprehensively enhance the company's market competitiveness and risk resistance.

The self built capacity of energy storage business will be released

In the investment projects of Desai Battery in recent years, the construction of energy storage cell production capacity is one of the key points. It is understood that the Changsha energy storage cell project of Desai Battery plans to invest 7.5 billion yuan in fixed assets investment and arrange the energy storage cell project headquarters, R&D center and production center with a capacity of 20GWh in three phases. The project is expected to achieve an annual output value of 12 billion yuan after reaching full production capacity. The energy storage cell business is expected to start production in 2023. The first phase of the project is currently under construction, and the planned product for the first phase is lithium iron phosphate energy storage cells.

Regarding the progress of the project, a senior executive from Desai Battery revealed that, "the first phase of the energy storage cell project is progressing smoothly and is expected to be put into operation in the first half of this year. The progress of the second phase of the project will be determined based on the situation after the first phase is put into operation. As for whether the capital market will be used to raise funds, it will also depend on the market and project progress."

In terms of energy storage customer situation, Desai Battery added, "Desai Battery's energy storage packaging business currently has a good customer base, and some customers are already verifying our battery cell products. It is expected that the project will continue to maintain a high growth rate after production."

In recent years, with the decline of the consumer electronics market, institutions' predictions of consumer business have not been optimistic. For the consumer market, Desai Battery pointed out that, "our strategy is to maintain the stability of our business in this area as much as possible. On the one hand, we aim to maintain our position as a customer supplier. On the other hand, we aim to collaborate with new product lines as much as possible. Since the outbreak of the pandemic, we have been prepared for the long term by reducing costs, increasing efficiency, and making quality more stable, in order to make customers more satisfied and win a good share."

It is worth noting that in terms of power batteries, Desai Battery has chosen to engage in the BMS business. Desai Battery believes that, "its advantage lies in its high-quality business and sufficient gross profit margin, and the risk is much lower compared to directly engaging in power batteries. Currently, through our partners, our products have been applied to several major European brand car companies."