The capital reduction and repurchase may be related to the blockage of Ganfeng Lithium's impact on the listing.

After trading on March 12, Ganfeng Lithium (002460. SZ) announced that in order to facilitate the follow-up capital operation and financing arrangements of Jiangxi Ganfeng Lithium Technology Co., Ltd. (hereinafter referred to as "Ganfeng Lithium"), it was agreed that Ganfeng Lithium intends to use its own funds to repurchase the shares of Ganfeng Lithium held by some shareholders by way of targeted capital reduction. The capital reduction and repurchase may be related to the blockage of Ganfeng Lithium's impact on the listing. When the war investment was introduced in 2022, it was agreed that if Ganfeng Lithium could not achieve a qualified IPO before December 31, 2025, or did not meet the conditions for spin-off and listing due to regulatory policies and other reasons, the share repurchase procedure would be initiated. In this regard, on March 13, Times Weekly asked Ganfeng Lithium to get a reply, but as of press time, there was no reply. After the withdrawal of the war investment on March 12, Ganfeng Lithium agreed that Ganfeng Lithium intends to use its own funds to repurchase the shares of Ganfeng Lithium held by some shareholders in the form of targeted capital reduction and repurchase. The number of shares repurchased by Ganfeng Lithium is not more than 499 million shares, and the corresponding repurchase funds are about 1.600 billion yuan. In November 2022, Ganfeng Lithium plans to spin off Ganfeng Lithium and list it on the Shenzhen Stock Exchange. At the same time, the capital increase and share expansion were introduced, and a series of strategic investors were introduced. Among them, Xinyu Hongtu Service Management Center (Limited Partnership), Xinyu Zhongxin Zhonglian Service Management Center (Limited Partnership), and Xinyu Hongxiang Service Management Center (Limited Partnership) are all related to Ganfeng Lithium. Hainan Jimu Venture Capital Co., Ltd. and Hubei Xiaomi Yangtze River Industry Fund Partnership (Limited Partnership) (hereinafter referred to as "Xiaomi Yangtze River Industry Fund") are subsidiaries of Xiaomi Technology Co., Ltd. (hereinafter referred to as "Xiaomi Technology"), and the legal representative of Xiaomi Technology is Lei Jun. In addition, the Times Weekly noted that in addition to Xiaomi Technology, Zhuhai Gree Financial Investment Management Co., Ltd., a subsidiary of Zhuhai Gree Group Co., Ltd., and its subsidiary Zhuhai Xingge Capital Investment Co., Ltd. are also among the shareholders of Xiaomi Yangtze River Industry Fund. Among the rest of the investments, there are also Xinzhifeng (Wuhan) Equity Investment Fund Partnership (Limited Partnership), Jiahe Intelligent (300793. SZ), a wholly-owned subsidiary of Jiangxi Jiahe Electroacoustic Technology Co., Ltd., Xinyu Iron and Steel (600782. SH), a wholly-owned subsidiary of Xinyu Xingang Investment Management Co., Ltd., and GoodWe (688390.SH) and other well-known enterprises. At the time of the above-mentioned war investment "joining" Ganfeng Lithium, there was an agreement: in any case, Ganfeng Lithium failed to achieve a qualified IPO before December 31, 2025. or according to laws, regulations, listing rules and other regulatory policies, Ganfeng Lithium does not meet the conditions for spin-off and listing and is expected to be unable to achieve a qualified IPO before December 31, 2025, the share repurchase procedure will be initiated. However, just when Ganfeng Lithium promoted the spin-off and listing of Ganfeng Lithium Battery, in December 2022, Ganfeng Lithium and its actual controller Li Liangbin and Ou Yangming, then secretary of the board of directors, received the "Prior Notice of Administrative Punishment" due to suspected insider trading of Jiangte Motor shares. At that time, the company had already reminded that the incident might have an impact on the spin-off and listing of Ganfeng Lithium. In July 2024, Ganfeng Lithium received the "Administrative Penalty Decision", confiscated 1.1053 million yuan of illegal income, and imposed a fine of 3.3159 million yuan. and gave warnings to Li Liangbin and Ou Yangming, and fined 600,000 yuan respectively. According to the Rules for the Spin-off of Listed Companies (for Trial Implementation), listed companies or their controlling shareholders and actual controllers have been subject to administrative penalties by the China Securities Regulatory Commission (CSRC) in the past 36 months, and listed companies are not allowed to spin off subsidiaries for listing. During the "painful" period of losses, the downstream energy storage increased from the perspective of the Ganfeng Lithium Battery's capital reduction and repurchase of shares, and the withdrawal of the war investment, the listing plan of Ganfeng Lithium Battery may have been stranded during the year. In addition to the failure to hit the market, the operating conditions of Ganfeng Lithium last year were also deteriorating. Ganfeng Lithium will be profitable in 2023, with a total profit of 164 million yuan that year. In January ~ September 2024, it will turn from profit to loss, and the total profit will be -52.9402 million yuan. As of the end of September 2024, the total assets of Ganfeng Lithium Battery were 16.662 billion yuan, and the asset-liability ratio was 56.39%. Affected by market conditions, Ganfeng Lithium is also experiencing "pains" of losses. In 2024, Ganfeng Lithium expects a net profit attributable to the parent company of 1.400 billion yuan ~ 2.100 billion yuan, a year-on-year decrease of 142.45% ~ 128.30%. In this regard, Ganfeng Lithium said that affected by the price fluctuations of lithium products, the prices of financial assets held by it have been significantly impacted, showing a downward trend compared with the beginning of the period. Among them, the share price of Pilbara Minerals Limited fell particularly significantly, which directly led to a large-scale fair value change loss of about 1.64 billion yuan. At the same time, due to the decline in the sales price of lithium salt and lithium battery products, although product shipments increased year-on-year, the performance decreased sharply year-on-year. In addition, Ganfeng Lithium made asset impairment provisions for inventory and other related assets, so its net profit fell sharply year-on-year. Ganfeng Lithium, as a "lithium mine duo", has been committed to expanding to the downstream of the lithium battery industry chain in recent years. On the same day as announcing the capital reduction to repurchase Ganfeng Lithium Battery's shares, Ganfeng Lithium continued to "increase" downstream energy storage. In February this year, Ganfeng Lithium acquired all the shares of its holding subsidiary, Shenzhen Yichu Energy Technology Co., Ltd. (hereinafter referred to as "Shenzhen Yichu"), from Ganfeng Lithium at a price of 200 million yuan. Due to the company's and its subsidiaries' plans to increase their capital to invest in Shenzhen Yichu and Shenzhen Yichu plans to introduce an employee shareholding platform, it actually obtained 71.35% of the equity of Shenzhen Yichu from Ganfeng Lithium Battery. On March 12, Ganfeng Lithium increased its paid-in capital contribution to Shenzhen Yichu by 250 million yuan while keeping its subscribed capital contribution to Shenzhen Yichu unchanged at 450 million yuan. Ganfeng Lithium said that the increase in paid-in capital is to ensure the demand for operating funds in Shenzhen, better promote the development and business expansion of its energy storage business, and is conducive to cultivating the future profit growth point of the energy storage business, which is in line with the company's upstream and downstream integrated development strategy. As of the end of September 2024, the asset-liability ratio of Shenzhen Yichu was 60.89%, and the net assets were 97.9115 million yuan. From May to September 2024, there will be no revenue.