BAIYU Enters into Definitive Agreement to Acquire Leading Energy Storage and Lithium Battery Company, Expanding into Renewable Energy Market

Rhea-AI Summary

BAIYU Holdings (Nasdaq: BYU) has entered a definitive agreement to acquire Shenzhen Jintongyuan Energy Storage Technology, a leading Chinese tech enterprise specializing in energy storage batteries. The acquisition, valued at approximately US$105 million, marks BAIYU's expansion into the renewable energy storage battery market. Jintongyuan focuses on R&D, design, and services for energy storage batteries and lithium battery products, primarily serving the North American market. The company offers customized solutions for large electric power vehicles and aims to become a global leader in energy storage power and lithium battery product operations.

BAIYU's CEO, Ouyang Renmei, emphasized the acquisition's alignment with the company's vision of sustainable development and circular economy. The transaction is expected to close in September 2024, subject to customary closing conditions.

Positive

• Acquisition of Jintongyuan for US$105 million expands BAIYU's presence in the renewable energy storage battery market
• Jintongyuan's focus on the North American market provides BAIYU with access to a lucrative new geographic segment
• Acquisition aligns with BAIYU's strategy for sustainable development and circular economy
• Jintongyuan's customized solutions and full-lifecycle services could provide a competitive advantage in the energy storage sector

Negative

• Large cash outlay of US$105 million for the acquisition may impact BAIYU's short-term financial position
• Integration challenges and potential cultural differences between the two companies could affect synergy realization
• Expansion into a new industry sector (energy storage) may present operational and market risks for BAIYU

Insights

Financial Analyst

This acquisition marks a significant strategic shift for BAIYU, diversifying its portfolio into the high-growth renewable energy sector. The RMB750 million ($105 million) deal represents a substantial investment, indicating BAIYU's commitment to this new direction. While the immediate financial impact may be dilutive due to the cash outlay, the long-term potential in the energy storage market could drive future growth.

Investors should note that BAIYU's move from a B2B e-commerce platform to a tech-focused energy company represents both opportunity and risk. The success of this pivot will largely depend on how well BAIYU can integrate Jintongyuan's operations and capitalize on the growing demand for energy storage solutions, particularly in North America.

Tech Expert

Jintongyuan's focus on high-performance energy storage batteries and their application in large electric vehicles positions BAIYU well in the rapidly evolving clean energy landscape. The emphasis on safety, reliability and system integration in battery technology is important for market acceptance and regulatory compliance.

The company's intelligent services model and customized, all-scenario, full-lifecycle solutions approach could provide a competitive edge. However, reliance on third-party partners for production and installation may present challenges in quality control and scalability. BAIYU will need to carefully manage this aspect to ensure consistent product quality and timely delivery to maintain Jintongyuan's market position.

Market Research Analyst

The energy storage market, particularly in North America, presents significant growth opportunities. With the increasing adoption of renewable energy and electric vehicles, demand for high-performance batteries is set to surge. Jintongyuan's focus on this market aligns with these trends.

However, competition in this sector is intense, with established players and new entrants vying for market share. BAIYU's success will depend on Jintongyuan's ability to differentiate its offerings through technological innovation and superior customer service. The customized sales model and end-to-end solutions approach could be key differentiators, but execution will be critical. Investors should monitor BAIYU's ability to leverage Jintongyuan's expertise to capture a significant share of this growing market.

BRADENTON, Fla., Aug. 27, 2024 /PRNewswire/ -- BAIYU Holdings, Inc. ("BAIYU" or the "Company") (Nasdaq: BYU), a leading B2B bulk commodity e-commerce platform and supply chain service provider, today announced that the Company, through its wholly owned subsidiary Shenzhen Baiyu Jucheng Data Technology Co., LTD., has entered into a definitive share purchase agreement (the "Agreement") on August 21, 2024 with Shenzhen Jintongyuan Energy Storage Technology Co., Ltd. ("Jintongyuan"), a leading tech enterprise specializing in the R&D and production of high-performance energy storage batteries in China. This acquisition marks a pivotal milestone of the Company's ambitious strategy to expand into the renewable energy storage battery market.

Pursuant to the Agreement, BAIYU agrees to acquire 100% of the equity interest of Jintongyuan for a total cash consideration of RMB750 million (approximate US$105 million), payable in installments. The transaction contemplated by the Agreement has been approved by the Company's board of directors with the expected closing to occur in or around September 2024.

Jintongyuan is mainly engaged in the research and development (R&D), design, operation and maintenance, sales, and follow-up services of energy storage batteries, charging piles and lithium battery products, with a commitment to becoming a leading global energy storage power and lithium battery product operation service provider. Leveraging its advantages and expertise in the safety, reliability, and system integration of energy storage and lithium batteries, Jintongyuan now focuses on a new system integration business model supported by intelligent services, to enhance convenience and comfort for user experience. Currently, its energy storage battery products are mainly used in various large electric power vehicles such as electric trams, golf carts, forklifts, etc.

Jintongyuan currently focuses on the North American market, supported by a dedicated team in R&D, design, operation, maintenance, and sales. It secures orders through a customized sales model, overseeing the entire cycle from initial R&D and design to sales, operation and maintenance. Jintongyuan engages third-party partners for production and installation with customers' consent. Equipped with a robust technical management and control system, as well as an end-to-end system integration business system, Jintongyuan offers customized, all-scenario, and full-lifecycle solutions, including planning consultancy, design optimization, smart customization, intelligent operation and maintenance, and energy management.

Ms. Ouyang Renmei, CEO of BAIYU Holdings, Inc., stated: "The acquisition represents substantial progress in our expansion into the energy storage and lithium battery industries. Our goal is to drive Jintongyuan's growth and profitability through technological innovation and industrial upgrades. For years, we have advocated for global cooperation and competition as essential to achieving sustainable development and a circular economy. This acquisition aligns perfectly with our vision of a growth model centered on reduction, high efficiency, reuse, and recycling – an approach of strategically significance for global environmental optimization and carbon emission reduction. "

About BAIYU Holdings, Inc.

BAIYU Holdings, Inc. (NASDAQ: BYU) is a leading B2B bulk commodity e-commerce platform and supply chain service provider. Currently, the Company is focused on expanding its new business in photovoltaic, energy storage power, and fast-charging power stations, along with services for the new energy industry. The Company's business involves investing in fast-charging power stations, commercial power stations, and offering integrated new energy solutions and operations that encompass photovoltaic, energy storage, and fast-charging power stations. It offers comprehensive solutions and operations for global new energy storage systems and specialized sectors. With a central focus on new energy and an orientation towards integrated power systems, the Company is dedicated to fields like clean energy, smart power, intelligent photovoltaic, and the operation and maintenance of fast-charging station outlets. For more information, please visit www.baiyuglobal.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "approximates," "assesses," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

BAIYU Holdings, Inc.
Investor Relations Department
Email: ir@baiyuglobal.com

Ascent Investor Relations LLC
Tina Xiao
President
Phone: +1-646-932-7242
Email: investors@ascent-ir.com 

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SOURCE BAIYU Holdings, Inc.

FAQ

What company is BAIYU Holdings acquiring?

BAIYU Holdings is acquiring Shenzhen Jintongyuan Energy Storage Technology Co., , a Chinese tech enterprise specializing in energy storage batteries and lithium battery products.

How much is BAIYU paying for the acquisition of Jintongyuan?

BAIYU is paying a total cash consideration of RMB750 million (approximately US$105 million) for 100% equity interest in Jintongyuan.

When is the acquisition of Jintongyuan by BAIYU (BYU) expected to close?

The acquisition is expected to close in or around September 2024, subject to customary closing conditions.

What market does Jintongyuan primarily focus on for its energy storage products?

Jintongyuan primarily focuses on the North American market for its energy storage battery products and services.

How does the Jintongyuan acquisition align with BAIYU's (BYU) business strategy?

The acquisition aligns with BAIYU's strategy to expand into the renewable energy storage battery market and supports its vision of sustainable development and circular economy.