Gotion High-Tech has announced a new private placement plan aiming to raise up to 5 billion yuan. The funds are intended for expanding production capacity for power batteries, energy storage batteries, and other lithium batteries, as well as supplementing working capital.
The total investment for the projects tied to this fundraising amounts to 14 billion yuan. Combined with an 8 billion yuan expansion plan announced just a few months ago, the company's total recent investment commitments have reached 22 billion yuan. However, by the end of the third quarter of last year, the company's short-term borrowings were close to 28 billion yuan, and its long-term borrowings exceeded 20 billion yuan. Its available cash was insufficient to cover its short-term debt.
It is noteworthy that a previous fundraising round completed in 2021, which included a battery cell project for Volkswagen with an investment exceeding 10 billion yuan, has undergone multiple changes and delays and remains unfinished to this day, five years later.
For the year 2025, Gotion High-Tech projected a significant increase in performance, with annual net profit attributable to shareholders estimated between 2.5 billion and 3 billion yuan, representing a doubling year-on-year. However, approximately 1.7 billion yuan of this profit came from fair value changes related to Chery Automobile's listing in Hong Kong.
Furthermore, from 2022 to 2024, the company's other income, including government subsidies, amounted to 922 million yuan, 1.273 billion yuan, and 1.344 billion yuan respectively. Each of these figures exceeded the net profit attributable to shareholders for the same periods, which were 312 million yuan, 939 million yuan, and 1.207 billion yuan respectively.
More importantly, Gotion High-Tech's cash collection ratio has consistently remained low, in the range of 60% to 70%, which is significantly lower than that of other leading battery manufacturers.
Additionally, from 2022 to 2024, the company's accounts receivable and notes receivable were 8.737 billion yuan, 13.04 billion yuan, and 16.834 billion yuan respectively. The days sales outstanding (DSO) for these periods were 122 days, 124 days, and 152 days, showing a clear year-on-year increasing trend for both receivables and their collection period.
In fact, prior to 2020, the company was severely troubled by collection issues, with its annual DSO once reaching as high as 385 days. This metric saw a significant improvement in 2021 and 2022. However, based on the latest data for cash collection ratio and receivables, the company's collection challenges appear to be re-emerging.
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