|A Silicon Valley start-up, which is a subsidiary of a Singapore-listed company, is getting a US$20 million injection to develop its next-generation lithium-ion battery.
The Dragon Group International announced that Zhuhai Yinlong Energy Co. (YLE) will invest US$20 million in DGI’s subsidiary, EoCell Limited.
DGI is, in turn, a 41% subsidiary of Singapore listco ASTI Holdings.
EoCell designs, develops and sells next-generation lithium ion batteries and related materials for cell phones, portable electronics, and off-grid energy storage.
In particular, these batteries and materials are used in electric vehicles.
With the US$20-million injection, YLE will subscribe for 940,000 new ordinary shares in EoCell, representing 40% of the enlarged share capital of EoCell. This deal values the entire EoCell at US$50 million while DGI’s current market capitalization is merely US$4 million.
The Dragon Group International is an SGX Mainboard-listed company which distributes electronic components and test consumables, supplies semiconductor equipment, materials and tooling, and develops battery and storage solutions.
YLE is a leading player in the new energy auto and energy storage system businesses in China, with a supply chain across the manufacturing of lithium batteries, manufacturing and assembly of electric buses, as well as the R&D, production and sales of smart grid energy storage systems.
YLE's ability to develop leading edge Lithium Titanate battery technologies with R&D facilities in USA and China puts it on a footing above its peers.
YLE has multiple gigafactories in various locations in China, and has announced plans for several more.
Its shareholders include Dong Mingzhu, president of Gree Electric Co., Ltd., Beijing Yanzhao Huijin International Investment Co., Ltd., Dalian Wanda Group Co., Ltd. and Jiangsu Jingdong Bangneng Investment Management Co., Ltd.
YLE is well capitalized to capture the high growth electric vehicle and storage markets.
Riding the transport super cycle
"Electric vehicles have witnessed strong growth of over 50% in China in 2016, and the growth rate is expected to accelerate. I believe that YLE is the most appropriate and complementary partner for DGI and investor for EoCell. With this partnership and investment, DGI and EoCell are extremely well positioned to embark on this excitingly disruptive new energy and transport super cycle.”
Dato’ Michael Loh Soon Gnee, Executive Chairman & CEO of Dragon Group, comments, “YLE’s investment in EoCell and the partnership with DGI vindicates our vision and the success of EoCell's development of leading edge silicon anode and other battery materials.
"The strategic partnership will provide EoCell with additional financial resources and broader market access, open doors for us to license the EoCell technology to interested parties in the green energy & electric vehicle segment, and set the stage for future growth stimulated by multiple synergies between EoCell and YLE.
"This also unlocks the value of EoCell, valuing it at US$50 million, as compared to DGI’s current market capitalization of approximately US$4 million."
Currently, DGI holds a 93% stake in EoCell, and based on the enlarged share capital, DGI will hold 40%, similar to that of YLE. In theory, the stake is worth US$20 million as well.
The remaining 20% stake of EoCell will be held by the key management of EoCell.