Summary: At the end of May 2024, Fulin Precision's cathode material precursor project was signed in Shehong City, Sichuan Province. The signing of the project helps Fulin Precision to extend industrial chain to the upstream sector.

On 22 May 2024, at the 2024 Investment Promotion Conference and Project Signing Ceremony of Shehong City, Sichuan Province, the 100,000 t/a lithium battery cathode material precursor project of Mianyang Fulin Precision Machining Co., Ltd. (Fulin Precision) was signed, with a total project investment of USD73.20 million (RMB520.00 million). The signing of the project will be conducive to Fulin Precision's upward extension of the lithium battery industry chain, and at the same time, solve the problems of cost control and raw material supply for processing the existing cathode materials, and expand its Lithium ferrous phosphate (LFP) production capacity.

Founded in 1997 with a registered capital of USD170.33 million (RMB1.21 billion), Fulin Precision engages in research, development, production and sales of automotive engine parts and accessories, intelligent electronic control for new energy vehicles and new energy lithium-ion battery cathode materials. At present, Fulin Precision's auto parts and accessories manufacturing and lithium battery cathode materials account for 51.26% and 48.74% of its revenue respectively.

In terms of capacity, Fulin Precision has capacity of 140,000 t/a LFP, but its annual report shows that in 2023, its LFP output was only 42,100 tonnes, and its capacity utilisation rate was only 30.11%. In addition, its subsidiary Sichuan Fulin New Energy Materials Co., Ltd. has a 60,000 t/a new energy lithium battery cathode materials project and the 50,000 t/a new energy lithium battery cathode materials project did not meet expectations. The main reasons include: in 2023, lithium battery upstream raw material prices fluctuated significantly and thus downstream lithium battery producers' procurement slowed down.

In terms of performance, Fulin Precision's operating revenue in 2023 reached USD821.23 million (RMB5.76 billion), down by 21.58% YoY; net profit attributable to shareholders of listed companies reached -USD76.34 million (-RMB542.73 million), down by 184.12%.