Huasheng Lithium Electric reports consecutive losses excluding non-recurring gains; the actual controlling party plans to cash out 190 million; over-raising in the IPO amounts to 1.87 billion.

China Economic Net, Beijing, April 3 (via China Economic Net) — Huasheng Lithium Battery (688353.SH) disclosed last night the “Announcement on the Share Reduction Plan of Certain Parties Acting in Concert of the Controlling Shareholder and the Actual Controller.”

According to the announcement, Shen Gang, a party acting in concert of the controlling shareholder and the actual controller, plans to reduce the company’s shares by no more than 51,637 shares through centralized competitive bidding, with the share reduction ratio not exceeding 0.0324% of the total number of the company’s shares; Yuan Yang plans to reduce the company’s shares by no more than 56,814 shares through centralized competitive bidding, with the share reduction ratio not exceeding 0.0356% of the total number of the company’s shares; Yuan Xuan plans to reduce the company’s shares by no more than 51,040 shares through centralized competitive bidding, with the share reduction ratio not exceeding 0.0320% of the total number of the company’s shares; Zhang Xuemei plans to reduce the company’s shares by no more than 21,933 shares through centralized competitive bidding, with the share reduction ratio not exceeding 0.0138% of the total number of the company’s shares; Zhangjiagang Bonded Area Huaying No. 2 Management Consulting Partnership Enterprise (Limited Partnership) (hereinafter referred to as “Huaying No. 2”) plans to reduce the company’s shares by no more than 909,400 shares through centralized competitive bidding, with the share reduction ratio not exceeding 0.5702% of the total number of the company’s shares; Zhangjiagang Bonded Area Huaying No. 3 Management Consulting Partnership Enterprise (Limited Partnership) (hereinafter referred to as “Huaying No. 3”) plans to reduce the company’s shares by no more than 504,175 shares through centralized competitive bidding, with the share reduction ratio not exceeding 0.3161% of the total number of the company’s shares. The planned total number of shares to be reduced by the above-mentioned parties acting in concert this time will not exceed 1,595,000 shares in total, and the planned shares to be reduced will not exceed 1% of the company’s total share capital.

The share reduction period is within 3 months after 15 trading days from the date of disclosure of the share reduction plan (i.e., from April 27, 2026 to July 24, 2026). If shares are reduced through centralized competitive bidding transactions, within any consecutive 90 natural days, the total number of shares reduced shall not exceed 1% of the total number of the company’s shares.

Based on the company’s closing price of 119.80 yuan on the previous trading day, the total cash-out amount planned by the above shareholders is approximately 191,081,000 yuan.

As of the date of disclosure of the announcement, Shen Gang directly holds 1,296,728 shares of the company, accounting for 0.81% of the company’s total share capital; Yuan Yang directly holds 1,426,728 shares, accounting for 0.89%; Yuan Xuan directly holds 1,281,727 shares, accounting for 0.80%; Zhang Xuemei directly holds 550,793 shares, accounting for 0.35%; Huaying No. 2 holds 5,597,000 shares, accounting for 3.51%; and Huaying No. 3 holds 3,103,000 shares, accounting for 1.95%.

All of the above shareholders are parties acting in concert with controlling shareholder and actual controller Shen Jinliang and Shen Ming. Among them, Shen Gang, Yuan Yang, Yuan Xuan, and Zhang Xuemei, together with Shen Jinliang and Shen Ming, have signed an agreement on parties acting in concert; Shen Ming serves as the executive affairs partner of Huaying No. 2; and Shen Jinliang serves as the executive affairs partner of Huaying No. 3.

This share reduction will not lead to any change in the company’s actual controller, and will not have a major impact on the company’s continuous and stable operating conditions.

From 2023 to 2025, the company’s operating revenue was 525 million yuan, 505 million yuan, and 869 million yuan, respectively; the net profits attributable to shareholders of listed companies were -23.9118 million yuan, -175 million yuan, and 13.2566 million yuan, respectively; the net profits attributable to shareholders of listed companies after deducting non-recurring gains and losses were -63.3296 million yuan, -209 million yuan, and -54.5943 million yuan, respectively; and the net cash flow from operating activities was -135 million yuan, -111 million yuan, and -257 million yuan, respectively.

Huasheng Lithium Battery was listed on the STAR Market of the Shanghai Stock Exchange on July 13, 2022. Its issuance size was 28.00 million shares, with an offering price of 98.35 yuan per share. The sponsor (lead underwriter) is Huatai United Securities Co., Ltd., and the sponsor representatives are Cai Fuxiang and Li Jun.

The total amount of funds raised in Huasheng Lithium Battery’s initial public offering of shares was 2.754 billion yuan. After deducting issuance expenses of 187 million yuan (excluding value-added tax), the net amount of funds raised was 2.567 billion yuan. The company’s final net proceeds from the offering were 1.867 billion yuan more than the original plan. The prospectus disclosed by Huasheng Lithium Battery on July 8, 2022 shows that the company intended to raise 7,000.28 million yuan, which would be used for the construction projects of an annual production of 6,000 tons of vinylene carbonate and 3,000 tons of fluoroethylene carbonate and a research and development center.

The issuance expenses for Huasheng Lithium Battery’s initial public offering of shares were 186.7955 million yuan. Among them, underwriting fees and sponsor fees were 143.1396 million yuan and 87.736 million yuan, respectively.

On May 10, 2023, Huasheng Lithium Battery issued an announcement stating that, for this profit distribution and capitalization of share capital, the company’s total share capital before the implementation of the scheme would be the base; a cash dividend of 1 yuan per share (including tax) would be distributed; and the capitalization from capital surplus reserve would increase the shares by 0.45 shares per share to all shareholders. The equity registration date for this equity distribution was May 9, 2023, and the ex-rights (and ex-dividend) date for this equity distribution was May 10, 2023.

(Edited by Wei Jingtíng)

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