On October 20, Xinlun Technology (002341) announced that the company would sell its aluminum-plastic film business assets and sign a business acquisition agreement with Xinlun composite technology (Changzhou) Co., Ltd. (hereinafter referred to as Xinfu), Yinchuan industrial fund and Yinchuan Yucheng investment. Yinchuan industrial fund and Yinchuan Yucheng investment respectively acquired 25.23% and 24.97% shares of new composite materials held by the company, with a total equity ratio of 50.20%, and a total acquisition amount of 195 million yuan.

After the equity delivery, Xinfu material will acquire other related assets of aluminum-plastic film held by the company, including the net equity assets of Xinlun material Japan Co., Ltd., the equity goodwill of Xinlun material Japan Co., Ltd. and intangible assets such as proprietary technology related to aluminum-plastic film business. Xinfu material will become the only main body of aluminum-plastic film business operation of the company.

For the reasons for the sale of aluminum-plastic film business assets, Xinlun technology said that it could alleviate its financial pressure in the short term.

In 2016, Shin Lun technology spent 9.5 billion yen (about 550 million yuan at the exchange rate at that time) to acquire the aluminum-plastic film business of t&t in Japan.

After the completion of the acquisition, sunlon technology will obtain t&t's lithium battery aluminum plastic film factory and related assets in Miyagi Prefecture, Japan, as well as the exclusive license in China and the non exclusive license in Japan for all patents and know-how for manufacturing and selling aluminum plastic film upholstered products.

In 2017, Xinlun technology fully adopted Japanese technology and Japanese equipment, invested 352million yuan to invest in the construction of aluminum plastic film flexible packaging production line project in Changzhou functional materials Industrial Park, with a production capacity of 3million square meters / month, and intended to take this opportunity to absorb Japanese technology to realize the localization of aluminum plastic film for power batteries and replace imports.

At the end of 2017, in response to the rapidly growing demand of power lithium battery manufacturers, Xinlun technology plans to expand a lithium battery aluminum plastic film soft packaging production line with a planned capacity of 3million square meters / month in Changzhou functional materials Industrial Park, with an estimated fixed asset investment of about 331million yuan.

In March, 2018, Xinlun technology and its wholly-owned subsidiary Xinlun composites proposed to sign an additional technical support agreement with t&t with an amount of 1.2 billion yen (about 70million yuan). T&t will help Xinlun technology to provide technical support and services for the design, construction and operation of additional production lines.

At the same time, shinlun technology also plans to relocate the Japanese triple factory to China and expand production in 2021 to build a new domestic production line (i.e. "China's second production line").

In fact, after Xinlun technology acquired t&t's aluminum-plastic film business, its aluminum-plastic film business, especially in the power field, faced multiple challenges. With the intensification of market competition and the further decline of subsidies, as well as the fierce competition between DNP and Showa electric in the domestic market, the aluminum-plastic film business of Xinlun technology has also encountered great pressure and challenges.

The decline in product prices and the rise in raw material procurement costs led to a decline in the profitability of its aluminum-plastic film.

In 2019, Xinlun technology achieved a revenue of 3.29 billion yuan and a net profit of 10.32 million yuan, a sharp decrease of 97% year-on-year. The main reason is that the aluminum-plastic film business is affected by price decline and cost rise.

In the first half of 2020, the revenue of Xinlun technology was 1.06 billion yuan, a year-on-year decrease of 26.9%; The net profit was -41.97 million yuan, a year-on-year decrease of 453%.

Xinlun technology said that affected by the epidemic, the company's aluminum-plastic film business was affected in the first half of the year.

The installed capacity changes in the domestic power market in the first half of the year also verified the development of Xinlun technology's aluminum-plastic film business.

GGII statistics show that from January to July 2020, the installed capacity of domestic soft pack batteries was about 1.17 GWH, a year-on-year decline of more than 50%, accounting for only 5% of the total. It is expected that the installed proportion of soft packed batteries in the whole year will also decline sharply year-on-year.

This means that the aluminum-plastic film business of Xinlun technology will face multiple pressures and challenges from external market competition, shrinking internal demand and rising raw material costs, which will further weaken the profitability of its aluminum-plastic film business.

In this case, Xinlun technology chose to divest its aluminum-plastic film business and hand it over to its subsidiary for independent operation, and sold more than 50% of the equity of the subsidiary, which can alleviate its financial pressure in the short term. However, its subsidiary is currently in a loss state, which may bring pressure and challenges to its aluminum plastic film business in the future financing and expansion.

Article source:High tech lithium power grid