Yihui Lithium Energy has announced plans to issue 5 billion yuan in convertible bonds to finance the construction of a power battery project. On March 20, the company from Huizhou made this announcement, stating that the funds will be allocated to a 23GWh cylindrical lithium iron phosphate storage battery project, which will primarily serve the passenger vehicle and household energy storage sectors. Upon completion, the project is expected to add approximately 21GWh of production capacity for 46 series cylindrical batteries.
As of the end of September 2024, Yihui Lithium Energy reported a total of about 81GWh in customer intent for its cylindrical lithium iron phosphate battery products over the next five years. Additionally, the company has received a total of 483GWh in customer intent for its ternary cylindrical batteries during the same period. The company believes that its capacity expansion is largely influenced by the production conditions of downstream customers.
The company distinguishes two types of customer intent: non-written intent expressed during commercial negotiations, and written intent which includes signed cooperation agreements, notification letters, project proposals, and inquiries. Yihui Lithium Energy’s projections regarding the absorption of products from its fundraising projects are based on several assumptions: (1) stable and rapid growth in demand for new energy vehicles without significant adverse factors; (2) sales of corresponding terminal models and energy storage products by downstream customers are not expected to experience substantial revisions; (3) customers will meet their sales forecasts; (4) the company will obtain notification letters from customers who have not yet been contracted and will complete product development and mass production as planned; (5) the supply share of products from the fundraising projects will not significantly decline among major customers.
Of the 81GWh in customer intent for cylindrical lithium iron phosphate batteries, approximately 31GWh comes from written sources and about 50GWh from non-written sources. For ternary cylindrical batteries, out of 483GWh in customer intent, around 341GWh is from written sources, which includes 187GWh from customers who have already received bulk supplies or contracts, while 142GWh comes from non-written sources.
