The huge market demand generated by China's new energy industry chain has led to a large number of companies actively raising capital to expand their production capacity.
So far in the second quarter of this year, more than 230 companies have issued private placement proposals, of which about 70 companies aim to target the new energy sector, with a combined planned capital raising of more than RMB 100 billion (15 billion), according to the latest statistics from Shanghai Securities News.
New energy vehicles, photovoltaic and other industries have the characteristics of larger upfront investment, and now that downstream demand has risen, and the industry chain needs to expand rapidly, the report said, citing industry sources.
In the downstream charging and battery swap equipment sector, GCL-ET announced on June 15 that it intends to raise up to RMB 5 billion ($772.2 million) in a private placement to support the construction of a battery swap station for new energy vehicles, an information system platform and an R&D center.
In the midstream manufacturing sector, Shanghai Leimu Electronics Co said on June 30 that it intends to raise up to RMB 700 million in a private placement for the new energy vehicle connector and new energy vehicle connector R&D center projects.
In the upstream manufacturing sector, Chengtun Mining Group Co said on June 4 that it intends to raise up to RMB 2.25 billion in a private placement for the Ka Longwei project and to supplement its working capital.
In another core area of the new energy industry - photovoltaic, industry chain companies are also accelerating financing to expand production.
Shanghai Liangxin Electrical Co on July 3 disclosed a private placement program, plans to raise up to RMB 1.58 billion for intelligent low-voltage electrical R & D and manufacturing base projects, and to supplement working capital.
In the field of new energy vehicles, production capacity is the key to the competition of each company. Not long ago, local media reported that Xpeng Motors CEO He Xiaopeng personally waited for a week at CATL in order to get batteries from CATL.
The downstream supply shortage has been transmitted upward, and the upstream lithium resources have also experienced a supply shortage.
Public companies are raising capital to boost the new energy industry, giving all sorts of money the opportunity to get involved.
Last year, CATL implemented a private placement program with participation from Hillhouse Capital Group and many other institutions, which has generated a profit of over 250 percent to date. This case has boosted the enthusiasm of all parties to participate in the private placement, with many major shareholders even taking up the full amount.