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MarketScreener Homepage  >  Equities  >  SHENZHEN STOCK EXCHANGE  >  Contemporary Amperex Technology Co Ltd    300750   CNE100003662

CONTEMPORARY AMPEREX TECHNOLOGY CO LTD

(300750)
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China's CATL buys into beaten down Australian lithium miner Pilbara

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09/04/2019 | 02:12am EDT

MELBOURNE (Reuters) - Chinese battery firm CATL has taken a stake in Australian lithium miner Pilbara Minerals, both companies said on Wednesday, after a supply glut hammered the sector and forced Pilbara to raise equity to fund working capital.

CATL, one of China's leading electric-vehicle battery makers, has bought an 8.5% stake in Pilbara as part of a A$91.5 million ($61.8 million) capital raising, Pilbara said in an exchange filing.

CATL's Hong Kong unit bought the stake through a A$55 million placement, while an additional A$36.5 million was raised through an institutional placement at A$0.30 a share. Pilbara shares fell to their lowest since April 2017 at A$0.315 per share on Aug. 26 after trading as high as A$0.80 in late May.

The move by Contemporary Amperex Technology Co (CATL) is the latest example of automotive battery makers taking stakes in mines to secure access to key battery ingredients such as lithium, nickel and cobalt ahead of an expected demand boom.

CATL said the investment was of "strategic significance" and would improve its upstream presence in the industry supply chain.

"In the long run, it will have a positive impact on the company's future financial situation and operating results," CATL added in a filing to the Shenzhen Stock Exchange.

The Chinese firm already has a 25.4% stake in another miner, North American Nickel Inc , which is evaluating a project in Greenland thought to be rich in two other battery metals, nickel and cobalt.

The placement, made when Pilbara's shares are near a 2-1/2-year low, dilutes the value of the company's shares at the same time analysts anticipate the sector struggling until at least the end of the year.

"Considering where the stock was closer to $1 not that long ago, it does seem quite dilutive to have to raise capital right now," said a Melbourne-based fund manager, who declined to be named.

"It just shows you how desperate that industry is for some capital at the moment. It wasn't completely a matter of survival but it would have meant a pretty drastic restructuring of their operations otherwise."

The fund-raising comes after Pilbara last week withdrew from the market a stake in its flagship Pilgangoora lithium project in Western Australia for lack of an appealing offer, and cut its sales forecast and curbed spending plans

Australian lithium producers are cutting production as prices plummet on falling demand in the world's top electric vehicle market after China altered its subsidies to the sector and because of increasing global trade tensions.

The raising will provide working capital for the ramp-up of the Pilgangoora operation and will also fund Pilbara's participation in a joint venture with South Korea's POSCO for a chemical conversion plant, the company said.

Pilbara said it will also offer a share purchase plan to raise up to an additional A$20 million.

(Reporting by Melanie Burton; additional reporting by Aby Jose Koilparambil in Bengaluru and Tom Daly in BEIJING; editing by Richard Pullin and Christian Schmollinger)

Stocks mentioned in the article
ChangeLast1st jan.
CONTEMPORARY AMPEREX TECHNOLOGY CO LTD End-of-day quote.
GOLD -0.13% 1490.893 Delayed Quote.16.43%
GREENLAND HOLDINGS CORPORATION -1.50% 7.2 End-of-day quote.19.64%
LME NICKEL CASH -4.00% 16325 End-of-day quote.56.37%
NORTH AMERICAN NICKEL INC. 8.57% 0.19 Delayed Quote.0.00%
PILBARA MINERALS LIMITED -3.39% 0.285 End-of-day quote.-52.80%
POSCO End-of-day quote.
SILVER -0.08% 17.52 Delayed Quote.13.44%
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Financials (CNY)
Sales 2019 41 150 M
EBIT 2019 5 239 M
Net income 2019 4 331 M
Finance 2019 27 191 M
Yield 2019 0,27%
P/E ratio 2019 35,3x
P/E ratio 2020 30,2x
EV / Sales2019 3,08x
EV / Sales2020 2,42x
Capitalization 154 B
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 24
Average target price 73,14  CNY
Last Close Price 70,09  CNY
Spread / Highest target 47,0%
Spread / Average Target 4,35%
Spread / Lowest Target -40,1%
EPS Revisions
Managers
NameTitle
Jia Zhou General Manager & Director
Ying Ming Wu Chairman-Supervisory Board
Yu Qun Zeng Chairman
Shu Zheng Chief Financial Officer
Ping Li Vice Chairman
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