The Zhitong Finance App learned that on March 13, there were media reports that Nengchain Intelligent Electronics (NAAS.US), which is listed on the US NASDAQ, has reached a final investment agreement with a well-known investment institution in the US to complete a new round of issuance totaling nearly 100 million yuan. Energy Chain Smart Electronics will issue 4,761,905 American Depositary Shares (ADS) worth about 43 million yuan (US$6 million) to the agency, and can conditionally subscribe for the same amount of ADS in the future, for a total amount of nearly 100 million yuan.
Currently, the global investment market is weak. Why is US capital increasing the NEV charging service market in China?
The reporter inquired about the 6-K announcement recently issued by Nengchain Smart Electronics. The document revealed the names of the two investment funds involved in this transaction — “Highbridge Tactical Credit Institutional Fund and Highbridge Tactical Credit Master Fund.”
Why is Highbridge Capital so human? Actually, for people in the investment community, this name is not unfamiliar; if you say Takahashi Capital, which is extremely famous in the US capital market, it is probably even more familiar. The “owner” of Takahashi Capital is the more powerful JP Morgan Asset Management (JP Morgan Asset Management), which belongs to JPMorgan Chase & Co. (JPMorgan Chase & Co.) It has more than 150 years of asset management experience, and the global asset management scale has reached 2.4 trillion US dollars. Its development history is a microcosm of the US financial industry. In 2009, Morgan Asset Management completed the overall acquisition of Takahashi Capital and continued to expand its business globally, managing $4 billion in assets for institutional investors, pension funds, foundations, and high-net-worth individuals.
US investment institutions, particularly local powerhouses headquartered in New York like J.P. Morgan Chase, have distinct investment preferences and styles, and have always been known for being discerning. However, this very large investment institution also has the other side of being “both courageous and determined”. Once they place a bet, they will choose to be friends of time, hold for a long time, and increase their positions many times.
Why can Smart Chain get into J.P. Morgan's line of sight? This is related to the fact that China's NEV and charging service industries are about to enter a tipping point of rapid growth. It can be said that this is the right time. According to China Automobile Association data, by the end of 2023, the total number of new energy vehicles in China was 20.41 million, accounting for more than half of the world. It is expected that by 2025, China's NEV stock penetration rate will be close to 15%, and the corresponding charging service market will explode, and the scale effect will bring more room for imagination.
This time, Energy Chain Smart Electronics received an investment from Takahashi Capital, a subsidiary of J.P. Morgan Chase. It is not only optimistic about the growth potential of China's NEV and charging service tracks, but also a recognition of the “success” of the investment target. More importantly, at a time when most institutional investors are cautious, J.P. Morgan Chase's purchase of new energy assets in China may have sent a signal that will encourage more international investment institutions to “follow up” investment.
According to the newly disclosed operating data, the energy chain smart electricity interconnection business achieved order-side profit in January 2024 by expanding the number of car owner users and increasing the coverage rate of charging stations. The charging service business achieved order-side profit in January 2024, and the profit level maintained positive growth for five consecutive months, and continued to expand in February. According to the announcement, EnergyChain Smart Electric expects charging capacity to increase 80% year-on-year in 2023, or reach 5 billion kilowatts, far exceeding the 55.8% year-on-year growth rate of China's total NEV in 2023. This is equivalent to 3.3 times the amount of public charging in the US in 2023, and 60% of public charging in Europe.
In addition, in 2023, Energy Chain Smart Energy also received attention and increased holdings from many top international investment institutions, including ELEC ETF owned by global asset management giant EnvestNet, CCSO, an active climate change ETF, and Invesco WilderHill Clean Energy ETF (PBW) by Invesco WilderHill Clean Energy ETF (PBW).
Previously, Energy Chain Smart Electronics estimated revenue for the full year of 2023 to be between RMB 310 million (US$44 million) and RMB 330 million (US$46 million), with a year-on-year increase of 234% to 256%. Meanwhile, Energy Chain Holdings, the parent company of Energy Chain Smart Electronics, also announced in February this year that its refined oil products business had achieved overall profit. As profitability continues to improve and financial conditions improve, Nengchain Smart Electronics's position in the field of new energy vehicles and charging services is expected to continue to improve, and will be favored by more investment institutions.