Changes in market environment and funding preparations: Nandu Power terminates the transfer of 100% equity of Huabo Recycled Resources.

Nandu Power (300068) announced that its planned asset sale, which had been under discussion for more than ten days, has been terminated.

On the evening of March 24, Nandu Power said in an announcement that, due to a phase of changes in the recent market environment and the company’s capital-raising arrangements, it has decided to terminate the transfer of 100% of the equity interest in its wholly owned subsidiary, Anhui Huabo Recyclable Resources Technology Co., Ltd. (hereinafter referred to as “Huabo Recyclable Resources”).

Nandu Power stated that, as of now, the shareholders’ meeting for deliberating the transaction has not yet been held, and the equity transfer agreement has not yet taken effect. The termination of this transaction will not cause any material adverse impact on existing production and operating activities or financial conditions, and there is no situation that would damage the interests of the company or all its shareholders. Pursuant to the agreement, Nandu Power will fully refund the RMB 15 million advance payment already paid by the counterparty in the prior transaction.

Looking back at the transaction background, on the evening of March 12, Nandu Power announced a proposed transaction value of RMB 1.415 billion to transfer 100% of the equity interest in Huabo Recyclable Resources to Anhui Shenghou Jilian Energy Operation and Management Partnership (Limited Partnership), while also repatriating RMB 1.15 billion in historical financial assistance. The company expected that the cumulative funds to be recovered would be RMB 2.565 billion. Based on preliminary calculations, upon completion of this transaction, the company expects its net profit for fiscal year 2026 to increase by about RMB 83 million.

Nandu Power said that selling 100% of the equity interest in Huabo Recyclable Resources is a key move for the company to clearly define its “lithium battery energy storage” core business. The goal is to adjust the industrial and product structure, focus efforts fully on AIDC lithium battery energy storage, promote the return of operating funds, and strengthen its layout in the lithium battery energy storage industry chain and market competitiveness.

According to available information, Huabo Recyclable Resources was established in 2014 and is a leading company in China’s lead-recycling sector. From 2015 to 2017, Nandu Power acquired 100% of the equity interest in Huabo Recyclable Resources in batches, with a total consideration of about RMB 2.276 billion.

During the period when lead-acid batteries dominated, Huabo Recyclable Resources provided important performance support for Nandu Power. However, as the industry’s technology route for energy storage shifted toward lithium, the business synergy between recyclable lead and the company’s existing layout has continued to weaken. In addition, it has incurred operating losses in recent years, which has created some drag on the listed company’s overall performance.

Data show that from January to October 2025, Huabo Recyclable Resources achieved operating revenue of RMB 1.31 billion and a net profit loss of RMB 191 million, and its asset-liability ratio remains at a relatively high level.

Nandu Power noted that exiting the equity interest in Huabo Recyclable Resources aims to focus on the core business, clarify the company’s “lithium battery energy storage” core business, improve its integrated layout across the lithium battery industry, and at the same time promote the return of operating funds.

With the termination of this equity transfer, it remains unknown whether Nandu Power will seek new acquirers again in the future.

As a full-stack energy storage system service provider, Nandu Power has, in recent years, continued to advance business transformation, focusing on new-energy energy storage. The company already has the capability to provide system solutions covering end-to-end processes from R&D and manufacturing of energy storage products and systems, integration, and through to operation services. Its products have achieved large-scale applications on both the user side, the power grid side, and the power generation side.

On performance, Nandu Power expects 2025 revenue to be RMB 7.0 billion to RMB 8.0 billion, representing a slight year-over-year decline. The company expects losses of RMB 890 million to RMB 1.25 billion, with the loss magnitude narrowing compared with the prior year.

The company said that in 2025 it continued to optimize its business structure and actively reduced production in the recyclable lead business. As a result, its revenue decreased by about RMB 2.0 billion compared with 2024, and its share fell from more than 40% to about 15%. Meanwhile, benefiting from growth in the data center industry and its own deep cultivation, the energy storage business achieved rapid growth, with its revenue share rising from 50% to about 75%. High-growth, high value-added lithium battery energy storage business has become the core pillar for revenue.

Regarding the reasons for the losses, Nandu Power stated that it was mainly due to increased losses in the recycling segment, and that phased capital pressure affected the company’s product delivery schedule beyond expectations. Factors such as increased asset impairment and higher provisions for bad debts also contributed.

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