On April 15, Funeng Technology (688567), a leading ternary soft-pack power battery, announced that there had been a major change in the company's controlling stake and the registration procedures for the transfer of the share transfer agreement had been completed.

According to the announcement, according to the share transfer agreement signed with Guangdong Hengjian Industrial Control New Energy and Guangzhou Industrial Control Group disclosed by Funeng Technology in January this year, the share transfer agreement has been registered. According to the previous announcement, after the completion of the share transfer, Guangzhou Industrial Control Group will become the controlling shareholder of the company, and the Guangzhou Municipal People's Government will become the actual controller of the company.

Hong Kong Funeng, the controlling shareholder of Funeng Technology, and Ganzhou Incom, the person acting in concert, transferred a total of 5% of the company's shares to Guangzhou Industrial Control Group and its concerted actor Hengjian Industrial Control New Energy, with a total of 61,105,100 shares. After the completion of the share transfer agreement, Guangzhou Industrial Control Group and all its concerted actors hold a total of 172 million shares of Funeng Technology, accounting for 14.1550% of the company's total share capital.

Guangzhou state-owned assets took over

According to the data, Funeng Technology, founded in Ganzhou, Jiangxi Province in 2009, is a domestic soft-pack power and energy storage battery manufacturer, and one of the first enterprises in China to achieve mass production of ternary soft-pack power batteries. The company has been working hard in the battery field for nearly 16 years. The first major customer signed in 2015 was BAIC New Energy Vehicle, and in 2018, Mercedes-Benz also gave 7 years of orders to Funeng Technology, and later successfully became the designated power battery supplier of GAC New Energy and Great Wall Motor, and the shipment volume once became the first in China that year. However, after the listing of the Science and Technology Innovation Board in 2020, the highlight moment of this "first share of power battery" is over, and continuous losses have become a curse, with a cumulative loss of up to 4 billion yuan in four years, and the stock price has fallen all the way to around 12.4 yuan / share today.

In addition to the large-scale recall of BAIC New Energy, a major customer, which dealt a blow to Funeng Technology, the constraints on technological innovation also made Funeng Technology to the point where it had to "sell itself", which gave Guangzhou state-owned assets the opportunity to "redeem".

Judging from the acquisition trajectory, Guangzhou state-owned assets have always recognized Funeng Technology, the leading battery target. As early as November 2022, Guangzhou Industrial Control Group, Guangzhou Industrial Investment Holding Group Co., Ltd., and Guangzhou Chuangxing New Energy Investment Partnership (Limited Partnership), which are also state-owned assets in Guangzhou, spent a total of 3.318 billion yuan to undertake the fixed increase of Funeng Technology.

In August 2023, Funeng Technology transferred 5% of its shares to Guangzhou Industrial Control and its controlled entity, Guangzhou Chuangxing, with a total price of about 1.728 billion yuan. In December 2023, the parties adjusted the acquisition plan, and Guangzhou Industrial Control Capital Management Co., Ltd., a subsidiary of Guangzhou Industrial Control Group, plans to acquire no more than 2% of the equity of Funeng Technology held by Shenzhen Anyan Investment Partnership (Limited Partnership) and plan to change hands again.

In January 2025, the controlling shareholders of Funeng Technology, Hong Kong Fu, Ganzhou Incom, and the actual controllers YU WANG and Keith D. Kepler plan to transfer 5% of the shares of Funeng Technology held in total to Hengjian Industrial Control New Energy and Guangzhou Industrial Control Group, with a total price of 972 million yuan. With the completion of the registration of the transfer of the share agreement on April 15, Funeng Technology finally has a state-owned "backer".

There is a lot of pressure to turn around performance

In addition to the favor of Guangzhou state-owned assets, as well as the technical strength of its founder Wang Yu, the company's products have long focused on ternary power batteries, and actively expand lithium iron phosphate, sodium-ion and other power battery cells, modules and battery packs, and has become one of the world's leading companies in ternary soft-pack power batteries. Born in May 1961, the founder Wang Yu, a Canadian citizen, has permanent residency in China and the United States, and is a senior lithium-ion battery scientist.

Wang Yu worked in Moli Energy in Canada's "Lithium Battery Whampoa Military Academy" in his early years, and worked as a R&D scientist from 1997 to 2000. In 2000, he moved to PolyStor in the United States as the director of R&D. In the later stage, he has been focusing on the technology development and industrialization of lithium-ion power batteries and intelligent energy storage batteries for new energy vehicles. In 2010, with the support of the Ganzhou Municipal Government, Wang Yu's first factory of Funeng Technology settled in Ganzhou, Jiangxi.

Ternary pouch battery has a higher energy density upper limit, richer material system, better safety and service life, etc., Wang Yu has always insisted that ternary pouch battery is an ideal technical route to adapt to the long-term development of electric vehicles, after 2018, Funeng Technology has become famous and has continued to order. As of 2023, Funeng Technology has ranked first in the installed capacity of pouch power batteries in China for five consecutive years, becoming the largest supplier of ternary pouch batteries in China.

However, after the highlight faded, with the increase of competitors in the same industry, especially the market share of lithium iron phosphate batteries surpassed that of ternary batteries, Funeng Technology continued to lose money and limited research and development under market competition and financial pressure. It has become the norm to increase income without increasing profits. From 2021 to 2023, Funeng Technology's revenue has increased from 3.5 billion yuan to 16.436 billion yuan, but its net profit has declined all the way, from a loss of 953 million yuan and a loss of 927 million yuan to a loss of 1.868 billion yuan.

In the first three quarters of 2024, Funeng Technology achieved operating income of 9.212 billion yuan, a year-on-year decrease of 17.98%; The net profit was -304 million yuan, a year-on-year increase of 80.57%. Despite the narrowing of losses, the company is still facing significant financial pressure.

Now, with state-owned assets in the ownership, will Funeng Technology be radiant again?

Will the change of controlling shareholder cause a major shock in management? This is the first move that investors are worried about. You must know that since its listing in 2020, Funeng Technology has replaced three general managers. However, the good expectation is that Funeng Technology's R&D in the field of solid-state batteries may be financially supported by new shareholders.

As early as the end of December last year, Funeng Technology announced that it would adopt the strategy of multi-electrolyte route in the field of solid-state batteries, and semi-solid-state and solid-state battery products have made significant progress, and plan to scale up and verify solid-state batteries in 2025. At present, Funeng Technology's semi-solid-state batteries have been used in high-end passenger cars, heavy trucks, low-altitude aircraft and other fields. All-solid-state batteries are expected to be mass-produced and installed in small batches in 2027.

With the support of Guangzhou state-owned assets, Funeng Technology may plug in new wings. Because Guangzhou Industrial Control has a number of enterprises related to new energy vehicles, covering vehicle manufacturing, parts production, charging facilities construction and other fields. As a leading enterprise in the power battery of new energy vehicles, Funeng Technology has obvious complementary advantages in the synergy of the industrial chain. With the support of state-owned assets, its path to internationalization may be just around the corner.