A subsidiary of Zhiguang Electric released the investigation report on the "Battery Explosion Fatal Accident" that occurred two years ago: workers operated improperly, resulting in a direct economic loss of 1.6816 million yuan.

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Everyday Economic News Reporter | Wu Zepeng | Edited by Huang Sheng

Just as Zhiguang Electric (SZ002169, stock price 14.33 yuan, market value 11.216 billion yuan) advances its acquisition of minority shares in its subsidiary Guangzhou Zhiguang Energy Storage Technology Co., Ltd. (hereinafter referred to as Zhiguang Energy Storage), the results of an investigation into a safety accident that occurred over a year ago have been announced recently.

The report shows that on June 14, 2024, Zhiguang Energy Storage experienced a battery pack flash explosion, resulting in one employee’s death, with direct economic losses of 1.6816 million yuan. The investigation concluded that this general other explosion accident was caused by workers operating improperly and inadequate risk identification by the production and operation unit, leading to a production safety responsibility accident.

In October last year, Zhiguang Electric proposed to purchase all or part of Zhiguang Energy Storage’s minority shares through issuing shares and paying cash, and also planned to raise supporting funds through share issuance. Earlier this month, Zhiguang Electric announced that the matter was still in progress.

It is worth noting that Zhiguang Electric did not disclose the safety production accident in its temporary announcements or periodic reports. The Daily Economic News reporter noted that in the 2023 Social Responsibility Report, Zhiguang Electric reported zero safety production accidents during the reporting period, but the 2024 ESG report did not mention the number of safety production accidents during the reporting period.

Lawyer Wang Zhibin from Shanghai Minglun Law Firm explained that whether mandatory disclosure is triggered depends on whether the accident had a significant impact on the company’s production and operation, such as causing shutdowns, major economic losses, or resulting in significant administrative penalties from regulators.

Accident occurred the day after self-developed electrical testing cabinet was put into use

According to the investigation report of the Huangpu District Emergency Management Bureau in Guangzhou City, on June 14, 2024, at around 12:47 p.m., a flash explosion occurred during testing of a lithium iron phosphate battery pack in Zhiguang Energy Storage’s energy storage workshop, causing injury to operator Chen Xiejie, who later died despite rescue efforts. The direct economic loss was 1.6816 million yuan.

The reporter learned that the electrical testing cabinet involved in the accident was a self-developed testing device used internally by Zhiguang Energy Storage for performance testing of battery packs. The device tests the battery packs’ charging and discharging performance to determine if they meet quality standards.

In early 2024, Zhiguang Energy Storage, unable to meet testing needs with existing facilities, planned to develop a testing cabinet capable of testing multiple batteries simultaneously. In April, the testing cabinet was assembled and tested for safety equipment and fire protection systems. On June 13, the cabinet was officially put into operation by the Quality Department. This means the accident happened the day after the testing cabinet was put into use.

According to operational procedures, safety should be observed during debugging, following step-by-step instructions, and during power-on testing, at least two staff members should be present. If abnormal testing occurs, records should be made, power should be immediately cut off, and technical engineers should be notified for analysis and handling. However, on the day of the accident, the employee was debugging alone, and after the device issued a fire alarm, the employee continued working in front of the cabinet.

The investigation found that the employee violated operational procedures. Zhiguang Energy Storage also had issues with risk identification and inadequate safety training. The reporter noted that on January 19, 2024, Zhiguang Energy Storage approved the “Electrical Testing Cabinet Operating Procedures,” but the cabinet was only assembled in April. The report mentioned that the company drafted operating procedures and conducted training before the device was available, and the equipment was not put into use for nearly five months afterward, failing to ensure employees had necessary safety knowledge.

Changes in “Safety Production” Statements in 2024 ESG Report

The Daily Economic News reporter observed that the accident was not disclosed in the company’s temporary announcements or periodic reports. Lawyer Wang Zhibin explained that whether it should be disclosed as a temporary announcement depends on three factors: the severity of the accident, the amount of loss, and subsequent impact. If the accident causes core business shutdowns or major disruptions affecting stock prices, disclosure is required. Otherwise, if it does not meet the standard, it can be omitted from periodic reports.

The reporter reviewed the China Securities Regulatory Commission’s “Administrative Measures for Information Disclosure by Listed Companies” and the Shenzhen Stock Exchange’s listing rules, which mainly require disclosure for “major events” and “major production and product safety accidents,” but do not specify general safety accidents.

However, it is noteworthy that the periodic reports show a change in Zhiguang Electric’s statements regarding “production safety.” The 2023 Social Responsibility Report clearly states that there were zero safety production accidents in 2022 and 2023, but the 2024 ESG report on safety production does not include the “number of safety production accidents.” That year, the company increased emergency drills from two to thirty times, with doubled investment.

The reporter also learned that Zhiguang Energy Storage is the core subsidiary of Zhiguang Electric, holding a 66.82% stake. Zhiguang Electric described Zhiguang Energy Storage as a key entity in its strategy for large-scale energy storage development. In 2023, 2024, and January–August 2025, Zhiguang Energy Storage’s revenue was 925 million yuan, 1.063 billion yuan, and 1.06 billion yuan, respectively, with net profits of 40.76 million yuan, 42.18 million yuan, and 65.81 million yuan.

In February this year, Zhiguang Electric announced multiple client orders, and Zhiguang Energy Storage secured two large orders worth over 1.2 billion yuan within days, both for energy storage systems.

The strong order growth directly boosted the parent company’s performance. According to Zhiguang Electric’s forecast for 2025, the company expects a net profit attributable to shareholders of 110 million to 160 million yuan, turning profitable with a year-on-year increase of 133.69% to 149.01%. One of the main reasons for this performance increase is the rapid development of the company’s energy storage business, with significant growth in orders and revenue.

To further strengthen control over this valuable asset, Zhiguang Electric initiated a purchase in October 2025. The plan involves acquiring minority shares of the controlling subsidiary Zhiguang Energy Storage through issuing shares and cash payments. On March 7, Zhiguang Electric announced that the acquisition was still underway.

Regarding whether safety accidents impact the company’s performance and the progress of the acquisition, the reporter contacted Zhiguang Electric by phone and email on March 26 but had not received a response by the deadline.

Cover image source: Daily Economic News Media Library