Yongtai Energy promotes the development of liquid flow energy storage business

On May 14th, Yongtai Energy announced that the company had signed an equity transfer agreement with Hyde Group to acquire 49% of the equity of Beijing Detai Energy Storage Technology Co., Ltd. (hereinafter referred to as "Detai Energy Storage"). After the completion of this equity acquisition, Yongtai Energy will hold 100% equity of Detai Energy Storage.

As of the evaluation benchmark date of December 31, 2023, the evaluation value corresponding to 49% equity of Detai Energy Storage is 70.1057 million yuan. This transaction is based on the sum of the assessed value and the actual paid up capital (21.903 million yuan) of Hyde Shares after the benchmark date of evaluation. After negotiation, the transaction price for the 49% equity of Detai Energy Storage is determined to be 92.087 million yuan.

According to the agreement between both parties, the equity transfer price shall be paid in two installments. Within 5 working days from the effective date of the agreement, Yongtai Energy shall pay the equity transfer price of 35 million yuan to Hyde Shares; Within 15 working days after both parties cooperate to complete the corresponding industrial and commercial registration procedures for the equity transfer, Yongtai Energy will pay the remaining equity transfer price of 57.087 million yuan to Hyde Shares.

At present, Yongtai Group Co., Ltd. (hereinafter referred to as "Yongtai Group") holds 18.13% of the total shares of Yongtai Energy in the listed company, and is the controlling shareholder of the company; Hyde Corporation is also a listed company controlled by Yongtai Group, which holds 75.28% of its shares. The acquisition of equity in Detai Energy Storage constitutes a related party transaction and does not constitute a major asset restructuring.

Yongtai Energy's main business is coal and electricity, forming a comprehensive energy supply pattern based on coal electricity complementarity. In 2023, based on the basic structure of the entire vanadium flow battery industry chain that has been formed, Yongtai Energy will accelerate the construction of various energy storage projects.

In the vanadium ore beneficiation project, Yongtai Energy's Dunhuang Huihong Mining Development Co., Ltd.'s 6000 ton/year high-purity vanadium pentoxide beneficiation production line (Phase I, 3000 tons/year) started construction as scheduled by the end of June 2023. The first tank of concrete in the main factory building was poured in August, the office building was capped in September, the boiler drum was in place in November, and the Phase I project is expected to be put into operation in the fourth quarter of 2024. As of now, this production line is the largest, most automated, and environmentally friendly stone coal vanadium extraction production line in China. After reaching production, it will occupy about 20% of the domestic market share for stone coal vanadium extraction.

In the vanadium battery production project, Zhangjiagang Detai Energy Storage Equipment Co., Ltd., a subsidiary of Yongtai Energy, has a 1000MW all vanadium flow battery energy storage equipment manufacturing base (Phase I, 300MW) dedicated to the research and development and production of new generation high-capacity, long-term all vanadium flow batteries and related products. Construction began as scheduled by the end of June 2023, and the pile foundation project and the first tank of concrete pouring in the main factory building were completed in September. The Phase I project is expected to be put into operation in the fourth quarter of 2024, and will occupy about 10% of the current domestic market share of all vanadium flow batteries after reaching full capacity.

According to the disclosure, the project completed the manufacturing, testing, and display of the first generation 32kW battery prototype in March 2023. The 1MW trial production line was put into use in June 2023. In October 2023, the first new generation 32kW battery stack was successfully produced and the battery stack product was finalized. In December 2023, the independently developed BMS program testing and energy storage module assembly were completed.

In addition, in 2023, Yongtai Energy also acquired the mining rights of Longling Vanadium Mine in Shitai County, Anhui Province through equity mergers and acquisitions, increasing the average grade by 0.93% and confirming 1.3474 million tons of vanadium pentoxide resources through review, further enhancing the company's advantage in high-quality vanadium ore resources and enhancing market competitiveness. At present, the company has a high-quality vanadium pentoxide resource of 1.5889 million tons, which has outstanding upstream resource advantages in the field of all vanadium flow batteries and is in a leading position in the vanadium extraction industry from stone coal.

For the target of this acquisition, Yongtai Energy stated in the announcement that Detai Energy Storage is a development platform for the company's energy storage industry. Currently, on the basis of the basic structure of the entire vanadium flow battery industry chain that has been formed, it is accelerating the construction of various energy storage projects, comprehensively building and improving the energy storage resource integration, purification and smelting, energy storage equipment manufacturing, project system integration, technology research and development iteration based on the new energy storage technology of large capacity and long-term vanadium flow batteries, and is committed to becoming a leading benchmark enterprise in the development of the entire energy storage industry chain, accelerating the formation of new productive forces.

Yongtai Energy stated that the acquisition of equity in Detai Energy Storage is aimed at further implementing the company's development strategy of "coal based and energy storage based". Through this acquisition, Detai Energy Storage will become a wholly-owned subsidiary of the company, further strengthening the management of the energy storage sector, improving decision-making and operational efficiency, promoting the implementation of energy storage projects, optimizing and strengthening the energy storage industry, accelerating the formation of new quality productivity, further enhancing the company's core competitiveness and market influence, enhancing the company's long-term profitability, and achieving green, low-carbon, and high-quality development.