Won the $2.4 billion lawsuit! Why didn't Gotion Hi-Tech make an announcement?

Bronco Finance

2024-06-19 21:11Posted on the official account of Shanxi Mustang Finance

"Power battery first share" sues American Town!

Author | Wu Lijuan

Editor丨Gao Yan

Source | Bronco Finance

The encounter of Chinese enterprises going overseas can be described as "ice and fire". For example, "the first share of power battery", winning the lawsuit, is another "hero"! If you lose, you will have to face a significant investment loss of billions of dollars. Fortunately, Gotion Hi-Tech was in danger and finally won the lawsuit overseas.

Recently, Gotion Hi-Tech (002074. SZ) is very busy overseas, investing tens of billions of large orders one after another.

According to the official website of the Moroccan government, on June 6, Gotion Hi-Tech, a company engaged in the research and development, production and sales of lithium-ion batteries for new energy vehicle power, signed a strategic investment agreement with Morocco to build the country's first electric vehicle battery gigafactory in Morocco, with a total cost of 12.8 billion dirhams (about 1.3 billion US dollars).

A week before the project was finalized, Gotion Hi-Tech's U.S. subsidiary also won a court ruling in the U.S. state of Michigan to continue the $2.4 billion project to build a battery component plant for electric vehicles.

With intensifying competition and more and more overseas restrictions, in recent years, Chinese battery companies have been hindered to a certain extent from going overseas. Gotion Hi-Tech's road to sea was not all smooth sailing.

For example, this project investment in Michigan, USA, almost yellow, Guoxuan Hi-Tech also sued the local town, although the final victory and won the project, but it is not easy to reach cooperation, the whole process is still very mysterious, since last year it was revealed that the project was blocked, so far I have not seen the company's official announcement.

In 2015, Gotion Hi-Tech was listed with the title of "the first share of power battery". At that time, CATL (300750. SZ) was only established for 5 years and landed in the capital market after 3 years. But now the market position of the two is hugely different, and CATL is already an industry leader.

As of June 19, the total market value of CATL was 831.4 billion yuan, and the total market value of Guoxuan Hi-Tech was 36.3 billion yuan, a difference of nearly 23 times.

Plans to build a factory in the United States have been blocked

Sue the local town

In late March, the Global Times published an article titled "Behind the Chinese Battery Companies' Sue for American Town", which cited a report by the local media Detroit News in Michigan that Gotion Hi-Tech's U.S. subsidiary, Gotion, Inc. (hereinafter referred to as "Gotion"), filed a lawsuit against the town of Greenchart, Michigan, on March 15, alleging that the town violated a contract promising to connect water pipelines, which blocked its plan to invest about US$2.4 billion to build a battery module factory in the state.

Gotion Hi-Tech said the town initially passed a resolution authorizing its U.S. subsidiary to connect the town's water system to the plant, but the town eventually violated that obligation, putting a project that could produce up to 150,000 tonnes of battery cathode material and 50,000 tonnes of anode material on hold.

Guoxuan Hi-Tech Securities Department responded: "For the progress of overseas matters, you can pay attention to the information publicly released by the company. If the information disclosure requirements of listed companies are met, an announcement will be made through the exchange. ”

As early as July 2023, "The Paper" released a report titled "Gotion Hi-Tech Responds to the Delay of the $2.4 Billion Battery Factory Project in Michigan, USA: The News Is Not True", which mentioned: "According to local media reports in Michigan, USA, the Gotion battery factory originally planned to start construction in Grand Rapids, Michigan has been approved for a one-year extension, and its overall completion time has also been postponed by one year to 2031."

At that time, Gotion Hi-Tech had said: "This news is not true", but could not disclose more information about the project.

Three months later, on October 12, 2023, Gotion Hi-Tech released another project in the United States. The company intends to build a lithium battery project in Illinois, USA, and entrusts Gotion, Inc., a wholly-owned subsidiary of the company, to sign relevant agreements with the Illinois government and other third parties.

The announcement also mentioned the progress of the project, and Gotion signed an agreement with the Illinois state government, the main content of which is: Illinois will provide tax subsidies for the project based on the previously passed REV subsidy bill specifically for new energy and electric vehicle companies. The final investment amount and subsidy amount will be subject to the actual investment situation. As of the announcement date, Gotion has completed the signing of the purchase agreement for the land, plant and other real estate assets of the project.

Source: Anhui Securities Regulatory Bureau

Then on December 7, the warning letter from the Anhui Securities Regulatory Bureau fell into the hands of Guoxuan Hi-Tech. The warning letter mentioned that on September 7, 2023, Gotion Hi-Tech signed a REV subsidy agreement with the government of Illinois, USA. The company failed to disclose the material transaction in a timely manner and did not disclose it until three months later, which violated the timeliness requirements of the listed company's information disclosure. Chairman Li Zhen was directly involved in the signing of the agreement, and Pan Wang, secretary of the board of directors, as the specific person in charge of information disclosure, failed to perform their duty of diligence and bore primary responsibility for the company's related violations.

In response to the construction of lithium battery projects in Illinois, the announcement of Gotion Hi-Tech has mentioned that the projects carried out by Gotion and the Illinois government are affected by geopolitical changes and trade protection, and there are still certain uncertainties in the specific implementation of relevant preferential policies and the market prospects for implementation progress.

Gotion Hi-Tech has received a warning letter due to the delay in disclosing this major investment project, why is the progress of the project in Michigan still not announced in time?

If you win the lawsuit, do you not believe it, is it a violation?

The official announcement of the Michigan project was released by Gotion Hi-Tech on October 25, 2023, a year behind the announcement on the official website of the Michigan state government.

Gotion Hi-Tech disclosed in the "Suggestive Announcement on the Construction of Michigan Battery Materials Project" issued on October 25: "At present, the purchase contract for the construction land of the relevant project has been signed. Gotion signed the agreement with the State of Michigan on October 24, 2023. The main contents of the above agreement are: the amount of the expected investment in the project during the term of the project, and the special subsidy allocated by the Michigan government based on the investment plan of the project. The final investment amount and subsidy amount will be subject to the actual investment situation. ”

According to the Global Times, the project has been met with opposition from the local community since the planned construction, with some residents even calling on the state government to cancel the project because of the Chinese government's investment. Local residents heard voices claiming that "Gotion Hi-Tech has an official Chinese background" and that the location of the factory is less than 160 kilometers from a U.S. National Guard training base, posing a so-called "national security risk."

Regarding the latest progress of the project, according to foreign media reports, Gotion, the US subsidiary of Gotion Hi-Tech, won a local court ruling in Michigan to build an electric vehicle battery module factory.

Since the announcement in October last year, Gotion Hi-Tech has not made any further announcements on this project. In the face of the media's claim that the company filed a lawsuit against Greenchart, Michigan, USA, Gotion Hi-Tech has been "secret" for three months, and has not announced the specific situation so far.

In this regard, the securities department of Guoxuan Hi-Tech said that the company has won the lawsuit, and the announcement may not yet be disclosed.

Listed companies should "fully disclose complete financial reports in accordance with the law, and fully disclose matters within the scope of statutory major events that actually occur". Xia Hailong, a lawyer at Shanghai Shenlun Law Firm, said that according to the Securities Law and other regulations, the information disclosed by the information disclosure obligor should be true, accurate, complete, concise, clear, and easy to understand, and there should be no false records, misleading statements or major omissions. Therefore, Gotion Hi-Tech's failure to disclose major overseas litigation in a timely manner is a violation.

In the stock bar, when it comes to the project of Guoxuan Hi-Tech to invest and build a factory in the United States, investors are also very cautious and worried.

However, there are also investors who are optimistic about the advancement of Guoxuan Hi-Tech's globalization.

Source: Stock Bar

Gotion Hi-Tech's experience is a microcosm of the obstacles that some Chinese companies have encountered in the U.S. market in recent years, and the U.S. has set up many obstacles to Chinese investment due to geopolitical and other factors.

On May 31, Wang Weijun, Secretary-General of the Shanghai International Arbitration Center, pointed out that in recent years, the number of new energy dispute arbitration cases has increased year by year, and from 2020 to 2023, the Shanghai International Arbitration Center has accepted more than 500 related cases, mainly involving wind power, photovoltaic, hydrogen energy and other technologies, and disputes in power generation, energy storage, new energy vehicles and other new tracks, with a total amount of 10.3 billion yuan.

However, the overall overseas layout of Gotion Hi-Tech has achieved great results. In 2015, Gotion Hi-Tech established a subsidiary in the United States, mainly engaged in the sales and research and development of power batteries. Since 2021, we have been gradually expanding our business. Power batteries and energy storage batteries are its two major business segments, accounting for more than ninety percent of its total revenue.

According to the statistics of SNE, a South Korean market research institution, the installed capacity of Gotion Hi-Tech power batteries last year was 1.71 GWh, with a market share of 2.4%, ranking eighth in the world. According to the annual report, its revenue from overseas regions last year was 6.4 billion yuan, an increase of more than 115%, contributing about one-fifth of the total revenue.

What do you think about Gotion Hi-Tech's undisclosed lawsuit in the United States? Do you know the power battery industry? Leave a message and let's chat!

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