EVE Enegy and SKInnovation's collaboration will further increase their synergy effect in terms of technology, market, management and supply chain.
China's local battery manufacturers have been gradually attracting more and more attention from foreign investors, especially Japanese and Korean firms. This is mainly due to the abolishment of the battery industry white list last April, which had precluded Japanese and Korean firms from subsidizing companies in China over the previous four years. Moreover, China is one of the largest new energy car markets globally, giving foreign firms more opportunity to expand and build a stable supply relationship.
SKInnovation is a firm under SK HOLDINGS that manages the production of power batteries, emphasizing soft package battery production. As EVE Energy is also focusing on that battery type, they are working together to promote new energy battery development. Apart from their collaboration in the manufacturing field, they are also cooperating in equity capital initiatives. Specifically, they signed a contract on a debt-for-equity swap on December 10.
The benefit of this debt-for-equity swap is that EVE Energy's asset-liability ratio is expected to decrease, maintaining a stable finance operation. Additionally, their collaboration will further increase EVE Energy's income from power batteries, the scale of which is expected to reach CNY 6 million to CNY 7 million in 2021.