When news broke that Huang Shilin, the former second-in-command of CATL, had reduced his stake, the share price of Ningwang suffered a setback, leading to the collapse of the battery sector. As of the close of trading on November 17, CATL's A-share market value was 1.78 trillion yuan, an evaporation of more than 60 billion yuan from the previous trading day (1.844 trillion yuan); the H-share market value was 2.40 trillion Hong Kong dollars, an evaporation of more than 70 billion Hong Kong dollars from the previous trading day (2.473 trillion Hong Kong dollars).
It is worth noting that Huang Shilin, a shareholder holding 10.21% of the shares, plans to inquire and transfer 45.6324 million shares of the company. The securities company that accepted the entrustment to organize the implementation of this inquiry and transfer was CICC. "Nengjianpai" asked relevant personnel of CICC. The inquiry and subscription quotation ended at noon on November 17, and many institutions participated in the quotation.
On the evening of November 17, Ningde Times announced the price inquiry transfer situation. The shares to be transferred in this inquiry transfer have been fully subscribed, and the initial price of this inquiry transfer is 376.12 yuan/share.
(The closing situation of Ningde Times A shares on November 17)
Calculated based on the currently announced preliminary transfer price, Huang Shilin will cash out approximately 17.163 billion yuan after completing the reduction of holdings.
16 institutions "crazy looting"
The "Shareholder Inquiry Transfer Plan" previously released by Ningde Times stated that the transferor and CICC took into account factors such as shareholders' own capital needs and negotiated to determine the lower price limit for this inquiry transfer, and the lower price limit for this inquiry transfer was not less than 70% of the average trading price of Ningde Times stock in the 20 trading days before the date of sending the subscription invitation.
In other words, the lowest price of the shares transferred this time is a 30% discount. If the competition among participating quotation agencies is fierce, the transaction price is likely to be higher than 30% off.
Judging from the information announced on November 17, institutional investors were very enthusiastic about quotations. A total of 55 valid quotations were received, and the corresponding effective subscription multiple of the participating institutional investors was 3.2 times. The shares to be transferred in this inquiry transfer have been fully subscribed, and the transferees have been initially determined to be 16 institutional investors.
The initially determined inquiry transfer price is 376.12 yuan/share, which is approximately 3.75% lower than the closing price on November 17. Some people in the investment community believe that even if the price is 10% lower than the average transaction price, many people will be attracted to buy it because there is room for arbitrage. "Assuming that you hold 100 million yuan of CATL shares, you can choose to buy 10% cheaper shares from Huang Shilin, and then sell the original 100 million yuan of CATL shares. This will reduce the cost by 10 million over time. Why not?"
In order to avoid the phenomenon of "smashing the market", the shareholder inquiry transfer plan stated that this inquiry transfer will not be carried out through centralized bidding transactions or bulk transactions, and it does not belong to the reduction of holdings through the secondary market. The transferred shares transferred by the transferee through inquiry shall not be transferred within 6 months after the transfer.
With these precautionary arrangements, theoretically there will not be much stimulation to the stock price. But in fact, this reduction in holdings is still considered to be bad news, and the market has moved upon hearing the news, which has put "Ning Wang" under short-term pressure.
Huang Shilin and Zeng Yuqun, the head of Ningde Times, are fellow villagers of Ningde, Fujian and high school classmates. In 1991, Huang Shilin received an invitation from Zeng Yuqun and joined Dongguan Xinke Magnetic Power Plant. Since then, the two have never been separated. In 2011, they bet together on the lithium battery industry and jointly invested in the founding of CATL. In the Ningde era, Huang Shilin was called the "second leader".
In August 2022, Huang Shilin suddenly resigned as vice chairman of CATL. At that time, there were rumors in the industry that Huang Shilin and Zeng Yuqun had different ideas and were dismissed from their posts in disguise, but this statement could not be further verified.
When leaving CATL, Huang Shilin directly held 466,021,310 A shares of CATL, accounting for 10.21% of the total share capital of CATL (including A shares and H shares). Some people in the investment community said that this single reduction of holdings may be the highest in the history of A-shares, worth 18.5 billion yuan based on Friday's closing price.
The above-mentioned person also mentioned that Huang Shilin has only reduced his holdings of 1% of CATL shares this time, and he does not know when he will reduce his holdings of 9.21% of the shares. This will also become a long-term suppression of CATL's capital.
Huang Shilin "starts over again"
After Huang Shilin resigned, CATL responded that Huang Shilin would explore business opportunities in the emerging field of "optical storage charging and inspection" and may form strategic synergy with the company in the future.
Huang Shilin has indeed made arrangements in this regard. He established Fujian Times Nebula Technology Co., Ltd. (referred to as "Times Nebula") as early as 2019, and in 2022 he established Fujian Jizhi Energy Storage Technology Co., Ltd. (referred to as "Jizhi Energy Storage"). Currently, Jizhi Energy Storage is the largest shareholder of Times Nebula. Huang Shilin is the actual controller of Times Nebula and Intelligent Energy Storage. CATL holds approximately 18.96% of Times Nebula shares. Huang Shilin also has a company under his name, Fujian Jixinguang Storage, Charging and Inspection Technology Co., Ltd., which was also established in 2022.
Previously, Times Nebula has launched a variety of energy storage products, covering all scenarios on the power generation side, grid side and user side. Judging from the information released by Times Nebula’s official WeChat account, it provides optical storage, charging, and inspection energy storage solutions for charging stations, and there are already application cases in Shanghai, Nanjing, Yangzhou and other cities, as well as overseas markets.
It is speculated that Huang Shilin's reduction in holdings this time is to speed up the deployment of energy storage. The capital scale of about 18 billion yuan is enough to support large-scale research and development, production capacity expansion and market development.
The decline in CATL’s stock price is also believed to be related to changes in market expectations for its energy storage orders.
On November 12, Haibo Xtron signed a ten-year strategic cooperation agreement with CATL. The two parties agreed that the cooperation goals for the next three years should be updated on a rolling basis at the end of each year. Among them, in the first three years, that is, from January 1, 2026 to December 31, 2028, it is agreed that Haibo Xtron will purchase no less than 200GWh battery products from CATL in total. On the second day after the news was disclosed, CATL A shares rose 7.56%, rising by more than 100 billion yuan in one day.
Recently, JPMorgan Chase issued a research report saying that regarding CATL's order from Haibo Xtron, analysts reminded investors to be cautious in interpreting the actual binding force of the order, because its actual execution volume will depend on future market demand. Similar agreements are common during the tight supply period of 2021-2022 and may provide contracting parties with priority during shortages. However, based on the past experience of the electric vehicle industry, if market demand is less than expected, the "volume guarantee commitment" may not be fulfilled.
The report also mentioned that nearly 50% of the H-share IPO locked shares will be unlocked from November 20, and about 77.5 million shares will face potential selling pressure. According to the report, considering that Ningde Times’ H shares still have a 10% premium over A shares, it is expected that the price difference of AH shares will narrow when the H shares are “unbanned”, so it lowered its target price by 4.2% to HK$575.
The report stated that it maintains the "neutral" rating for CATL's H shares and lowers the target price from HK$600 to HK$575, while maintaining the "overweight" rating for A shares with a target price of 480 yuan.