Huati Technology acquires Jiuzhou Resources for US$3 million to expand new energy business layout

On December 26, Sichuan Huati Technology Co., Ltd. (hereinafter referred to as "Huati Technology") announced that the company planned to subscribe for 85% of the equity of Mozambique Jiuzhou Resources Company (hereinafter referred to as "Jiuzhou Resources") through its subsidiary Huati International Energy for US$3,000,000 (approximately RMB 21.35 million). After the subscription is completed, Huati International Energy will become the largest shareholder of Jiuzhou Resources and obtain the lithium mining rights of Jiuzhou Resources.

It is reported that Jiuzhou Resources is a wholly foreign-owned enterprise registered in Mozambique. The company is responsible for operating lithium mine-related projects in Mozambique and owns 100% equity in the lithium mine of the Mozambique 11682 project.

According to relevant analysis reports, there are 25 ore-containing pegmatites in the 11682 project mining area, with an estimated 333 Li20 ore volume of 5.2022 million tons, with an average grade of Li20 0.76%; 334 Li20 prospective ore volume of 1.2406 million tons, with an average grade of Li20 0.91%; the total ore resources of 333+334 are 6.4428 million tons.

After Huati International Energy obtains control of Jiuzhou Resources, it will invest funds in batches to purchase fixed assets and mine mining based on the actual progress of the project and market conditions, and process the mined ore into lithium concentrate and sell it to relevant customers in the industry chain.

Huati Technology stated that this subscription will enable the company to control the mining, crushing, processing and transportation of the No. 11682 lithium mine in Mozambique, which can effectively promote the diversification of Huati Technology's business, further enhance the competitiveness of Huati Technology in the new energy industry chain, broaden the scope of Huati Technology's business, improve the layout of the new energy industry chain, and be able to control overseas lithium mining rights and improve the domestic key lithium battery resource security capabilities.

Huati Technology focuses on urban lighting and synchronizes cross-border new energy

Huati Technology is a comprehensive service provider for urban lighting, focusing on product R&D and manufacturing, engineering project installation, and investment, construction and operation of smart street lights in the field of urban lighting.

At present, Huati Technology's main products include: smart street lighting products equipped with LED information release screens, high-definition cameras, emergency alarms, 5G base stations, WiFi, environmental monitoring and other equipment; various traditional lighting products used in roads, landscapes, and cultural fields.

In 2021 and 2022, faced with the impact of multiple factors such as the contraction of social and economic development and the reduction of government investment expenditures, Huati Technology's performance declined and its net profit continued to suffer losses.

Against the background of poor performance in the past two years, Huati Technology has begun to actively expand its main business scope, enrich its product system, and increase investment in new energy business in recent years.

In 2022, Huati Technology proposed a new development strategy, which is to deeply integrate new infrastructure and new energy, explore the development path of the new energy industry, and propose the concept of "roadside distributed energy storage network based on smart street lights" for the first time in the industry, exploring the technological innovation of "new infrastructure + new energy".

In response to the difficulty of charging electric vehicles, Huati Technology has determined the construction of "An Easy Charge" and established a multi-functional urban energy station network integrating charging stations, battery swapping stations, micro energy storage, and distributed photovoltaics.

In March and July of this year, Huati Technology successively established Huati Green Energy and Huati Lithium Energy Company in the field of new energy. Among them, Huati Green Energy is mainly engaged in the sales of lithium batteries and related businesses, and Huati Lithium Energy is mainly engaged in the sales of lithium ore. Through the establishment of the new company, Huati Technology has formed a complete industrial chain of new energy batteries, which will facilitate its future expansion into upstream lithium ore mining business.

Through new business development, active market expansion, and completion of project delivery and acceptance, Huati Technology's performance began to rebound. In the first three quarters of 2023, Huati Technology achieved revenue of 499 million yuan, a year-on-year increase of 63.08%, and net profit attributable to the parent company was 58 million yuan, turning a loss into a profit year-on-year.

Summary

Faced with an increasingly competitive market in recent years, more and more LED companies have chosen to develop new energy-related businesses, including: Absen, Mulinsen, Inventronics, Halsey, Overclocking Three, Songsheng, Maoshuo Power, Aika, Guangpu, Baoming Technology, Igor, Wanrun Technology, CVTE, Jiuliang, etc. Some companies have formed new performance growth poles through new energy business, and more companies are actively investing in the layout.

In the future, more LED-related companies may flood into the new energy track and form unique development advantages in the new energy business through their own LED technology, bringing new opportunities to companies.