[YesAuto News] On March 16, Beijing Pride New Energy Battery Technology Co., Ltd. (“Pride”), a wholly-owned subsidiary of Guangdong Dongfang Precision Technology Co., Ltd. In Beijing, Beijing and Beijing New Energy Automobile Co., Ltd. (hereinafter referred to as “BAIC New Energy”) signed the “2018 First Half Procurement Agreement” (hereinafter referred to as the “Procurement Agreement”) in Beijing. A purchase order for approximately 38,000 power batteries was issued to Pride, with a total amount of approximately RMB 1.869 billion.
Pride’s main business is the design, R&D, production, sales and service of power battery system Pack for new energy vehicles, and provides overall power battery solutions for manufacturers of new energy vehicles. As of the end of 2017, Pride has formed a capacity scale of approximately 9Gwh, and will continue to add new capacity plans in accordance with market demand in the future.
The main business of BAIC New Energy is the research and development, production, sales and service of pure electric new energy passenger vehicles and core components. According to data from the Passenger Association, in 2017, BAIC New Energy sold 104,520 vehicles, making it the first domestic pure electric vehicle company with an annual production and sales of more than 100,000 vehicles. Among them, BAIC EC180 sold 78,079 vehicles, accounting for BAIC New Energy’s total sales. Nearly 75%.
In recent years, Pride has maintained a close business relationship with BAIC New Energy and has become the core supplier of BAIC New Energy's power battery system Pack. According to the announcement, Beijing Automotive Industry Investment Co., Ltd. holds 6.47% of Orient Precision's A-share ordinary shares. The controlling shareholders of BAIC Industrial Investment and BAIC New Energy are both Beijing Automotive Group Co., Ltd. According to relevant regulations, BAIC Industrial Investment and BAIC New Energy form a concerted relationship. BAIC Industrial Investment and BAIC New Energy are both affiliated legal persons of Dongfang Precision.
Dongfang Precision said that Pride and BAIC New Energy signed a purchase agreement for the first half of 2018, which provides a strong guarantee for the development of Pride's power battery system Pack business and is conducive to further consolidating Pride's market competitive advantage. The total amount of the purchase agreement signed this time is approximately 1.869 billion yuan, accounting for about 40% of the company's 2017 operating income. The full implementation of the purchase agreement is expected to have a positive impact on the company's 2018 operating performance.