On September 2nd, 2010, the lithium battery plate, famous for the rise of electric vehicles, once again galvanized, under the shelter of daily limit of Tibet Mining (000762.SZ) and Kane shares (002012.SZ), CITIC Guoan (000839.SZ) Heavy volume rose by 7.7%.

In fact, because of the concept of “lithium battery”, CITIC Guoan has emerged a magnificent market in the past 35 trading days. As of September 2, 2010, CITIC Guoan’s cumulative increase has reached 42.5%, far ahead. In the broader market during the same period of gains.

It is worth noting that, in this round of China CITIC Guoan, the market is filled with claims that listed companies are spending large sums of money to improve lithium batteries.

The reporter has also learned from authoritative sources that CITIC Guoan Group is planning to jointly invest RMB 18 billion in cooperation with CITIC Guoan to improve the entire upstream and downstream industrial chain of the lithium battery industry. In the afternoon on September 2, 2010, our reporter called CITIC Guoan for verification and his phone number has not been answered.

Improve the lithium battery upstream and downstream?

A person close to CITIC Guoan stated that of the 18 billion yuan investment, the huge investment of CITIC Guoan will mainly flow to the two subsidiaries closely related to lithium batteries, which are controlled by 99.375% of Qinghai Guoan Science and Technology Development Corporation (below Referred to as Qinghai Guo'an, and the controlling subsidiary of CITIC Guoan Mengguli Power Co., Ltd. (hereinafter referred to as China Unicom Co., Ltd.) is involved in lithium battery-related projects.

Qinghai Guoan also seems to have strong funding needs. In addition, Qinghai Guoan is currently actively seeking for the mining rights of Dongtai Jinar Lake and Yiliping Salt Lake. Once it has successfully won the mining rights, it also urgently needs large amounts of capital to invest in the subsequent infrastructure.

"Compared with domestic listed companies involving the lithium industry, CITIC Guoan has the status of a member of the national team. This is an advantage, coupled with its relatively complete layout in the entire industrial chain of lithium batteries, so this time huge amounts of money went to lithium batteries. The industry will have the potential to allow CITIC Guoan to emerge from the chaos and occupy an absolute advantage in the lithium battery industry, said the person close to CITIC Guoan.

There is no doubt that grabbing mineral resources will preempt the upper hand. With the right to exclusive exploitation of Salt Lake Taichung, Qinghai Guo'an has mastered the reserves of lithium resources. If it further wins the East Lake Jinal Lake and Yiliping Salt Lake, the reserves of lithium resources will be further upgraded.

“Lithium carbonate is an important raw material for lithium batteries, and Qinghai Guo’an extracts and manufactures lithium carbonate after extracting potash from salt lakes. It may be due to some minor problems in the process that the company’s annual output of lithium carbonate has not reached 20,000 tons. "A domestic brokerage researcher who has long tracked CITIC Guoan said. Even so, Qinghai Guo'an has produced 5,000 tons of lithium carbonate in 2009, and the output of lithium produced by its salt lake ranks first in the country.

In addition to holding a wealth of lithium resources, the middle reaches of the battery material also includes positive electrode material, negative electrode material, electrolyte, separator four parts, the brokerage researcher said that CITIC Guoan's CITIC Guinness now mainly do positive electrode material, "This It is also the most lucrative piece of lithium battery." According to public information, China Unicom's Gugli is currently the largest manufacturer of lithium cobalt oxide cathode material for lithium cobalt oxide and lithium manganate, and its products account for 40% of the domestic market share of lithium cobalt oxide.

As for downstream products, CITIC Guoan is slightly inferior.

However, in September 2009, CITIC Guoan stated that it had signed a letter of intent with Japan’s Toyota Tsusho Corporation, which stipulated that the two parties would jointly produce and sell battery-grade lithium carbonate-based battery materials and their downstream new energy industry products. The issues are further discussed.

Private placement fundraising conjecture

As a member of the new energy concept stocks, CITIC Guoan has become hot in the secondary market, which is evident from the amount of margin financing and securities lending.

According to the data released by the Shanghai and Shenzhen Stock Exchanges, CITIC Guoan has appeared on the financing buy list for many times since late August. Among them, on August 31st, CITIC Guoan's purchase amount of RMB 42,595,400 became the highest in Shanghai and Shenzhen. The sought after variety. On September 1st, CITIC Guoan once again had a financing purchase amount of 12.19 million yuan, and its financing balance reached 125 million yuan.

In addition to the concept of "lithium battery", the market funds appear to be waiting for the arrival of a heavy pound. CITIC Guoan will join hands with CITIC Guoan Group to spend 18 billion yuan to improve the lithium battery industry upstream and downstream.

As for the proportion of CITIC Guoan's contribution to the total amount of 18 billion yuan, no accurate information has been obtained yet. However, the rumor on this data is that CITIC Guoan will invest about 3 billion yuan.

“According to the current financial indicators, CITIC Guoan definitely needs to find ways to raise this 3 billion yuan of funds.” A person close to CITIC Guoan said.

According to CITIC Guoan’s 2010 interim report, the monetary capital on its books was only RMB 1,095 million, and there was still a shortfall of nearly RMB 2 billion, and the company’s operating activities and fund-raising activities had net outflows of over RMB 600 million in the first half of the year. Investment activities generated a net cash inflow of 1.38 million yuan.

As of June 30, 2010, CITIC Guoan had total assets of 10.668 billion yuan and total liabilities of 4.774 billion yuan. Once debts are fully paid to banks, this will increase its asset-liability ratio from 44.75% previously to 56.87%. Billions of financial costs.

Obviously, raising funds through targeted issuance is more realistic.

The strong upturn in the upswing is also creating a "good condition for issuing additional capital" for CITIC Guoan. According to the data of great wisdom, the weighted average price of CITIC Guoan during the 20 trading days from August 6 to September 2 2010 was RMB 13.33 per share, down from RMB 9 per cent to RMB 11.99 per share, which is 14.82 higher than that in the secondary market. Yuan/shares already have a discount of nearly 20%. Everything seems to be ready.