On November 29, Financial Association reported (Journalist Liu Mengran and Liang Xiangcai) that under the opportunity of constructing the "Zhengkai 3 million vehicle industry belt" in Henan province, Henan Mingtai Al. Industrial (601677.SH) is ramping up projects for new energy battery materials and aluminum plates for autos.

Today's announcement shows that the company plans to change part of the unused funds raised for the original project and accumulated earnings to be used for its wholly-owned subsidiary, Henan Hongsheng New Materials Technology Co., Ltd., to implement the "Aluminum Industry Park Project for Autos and Green Energy," with a total investment amount of 2.006 billion yuan. The amount of the raised funds involved in this change is 1.229 billion yuan, accounting for 96.87% of the company's actual raised total.

In August 2022, the company disclosed a plan to issue stocks to specific targets, intending to raise funds to invest in the "Annual Production of 0.25 million tons of New Energy Battery Materials Project," with raised funds arriving in August 2023. The project products include battery foil, aluminum plastic film, precision-cut battery foil, battery pack packaging plates, and battery water-cooling plates, mainly applied in the new energy battery field.

At that time, significant breakthroughs in key technologies for power batteries drove rapid growth in aluminum materials for new energy batteries. The company made prudential decisions to advance the original fundraising investment project's construction based on market demand.

In the reasons for the changes, the company stated that in the original fundraising project "Annual Production of 0.25 million tons of New Energy Battery Materials Project," battery foil, water-cooling plates, and other new energy battery materials can be steadily increased through the optimization of existing production capacity and efficiency improvement, while retaining the newly added battery foil production capacity in the changed Hongsheng New Materials' "Aluminum Industry Park Project for Autos and Green Energy," to meet customer demand for new energy battery materials.

The company mentioned in the reasons for the changes that the Zhengzhou metropolitan area has formed a development pattern of "one belt, multiple points", focusing on complete vehicle manufacturing, strengthening the entire industry chain of power batteries, auto parts, and automotive electronics. The company closely watches market opportunities, grasps the principles of nearby support in the automotive market, fully leverages its geographical advantage in Zhengzhou, and flexibly adjusts its product strategy.

The new project is implemented by Hongsheng New Materials, with a capacity of producing 200,000 tons of automotive aluminum plates, 20,000 tons of battery aluminum foil, and 35,000 tons of pre-stretch plates annually. The total investment for the project is 2.006 billion yuan, planning to use raised funds of 1.229 billion yuan.

In the feasibility report, the company mentioned that thanks to the boost from new energy vehicles, consumer electronics, energy storage, and other emerging industries, China has become the largest producer and consumer in the battery industry. The products of this project mainly include aluminum plates and strips for automotive use, battery aluminum foils, and pre-stretched plates.

According to the plan, the new project is expected to gradually commence production and generate revenue after reaching its intended usable state in January 2027. The total investment return rate for the new project is 15.7%, with an investment recovery period of 8 years.

Henan Mingtai Al. Industrial is a leading enterprise in aluminum processing, with main businesses including aluminum plates, strips, and foils, aluminum profiles, and comprehensive application of renewable resources. Financial data shows that in the first three quarters of this year, the company's revenue reached 23.655 billion yuan, up 21.58% compared to the same period last year; the net income attributable to shareholders of the listed company was 1.411 billion yuan, a year-on-year increase of 21.58%. However, due to falling aluminum prices and exchange losses, the net income for Q3 was 0.341 billion yuan, a decrease of 4.65% year-on-year.

In terms of transformation, the company has ventured into high technologies and high value-added fields such as aluminum for new energy, aluminum for new materials, aluminum for transportation, and lightweight aluminum for autos.

According to the company's previous disclosures, its products have been directly or indirectly supplied to leading automotive companies such as BYD, NIO, BAIC, Great Wall, Tesla, SAIC, Yutong Bus Co., Ltd., and CIMC Vehicles; products in the electronics and new energy sectors are mainly supplied to Shenzhen Kedali Industry, Gotion High-Tech, Zijiang New Materials, Fujifilm Holdings Corporation Unsponsored ADR, and Boro Guanye.