GCL Technology (03800) may acquire approximately 81.91% of GCL's shares in Sichuan GCL Lithium Battery Technology

Zhitong Finance App News, GCL Technology (03800) issued an announcement. On October 19, 2026, the company and the seller (GCL Group Co., Ltd.) entered into a non-legally binding memorandum of understanding regarding the possible acquisition of approximately 81.91% of the shares of Sichuan GCL Lithium Battery Technology Co., Ltd.

The preliminary estimate of the cost is approximately RMB 2.5 billion. The consideration is to be settled by the company using a combination of cash and the company's allocation and issuance of consideration shares to the seller and/or its designated entity. The portion to be settled in cash is approximately RMB 650 million, while the portion to be settled through allotment and issuance of consideration shares is approximately RMB 1,850 million. The issue price of compensation shares shall not be less than the net asset value of the company per share of approximately HK$1.3 (minimum issue price) as of June 30, 2026. Based on the minimum issue price, the total number of shares expected to be worth no more than 1,671 billion shares.

The target company is mainly engaged in R&D, production, sales and service of lithium iron phosphate cathode materials for new energy batteries in China. The target company is located in Renshou County Economic Development Zone, Meishan City, Sichuan Province. It was established to cooperate with the national “dual carbon” strategic plan, expand the field of lithium iron phosphate cathode materials, improve the clean energy industry chain, and promote ecological cost reduction and efficiency in the energy storage industry. As of the date of this announcement, the target company's first phase production facilities covered an area of about 355 acres, with a total construction area of about 156,000 square meters, and an overall planned area of 1,000 acres. Its main facilities include an advanced production plant optimally designed for large-scale manufacturing of advanced materials, with an annual output of 120,000 tons of lithium iron phosphate.

In view of the rapid increase in market demand for lithium iron phosphate cathode materials, the directors believe that the possible acquisition will enable the Group to (i) expand its business to the field of lithium iron phosphate cathode materials supported by national carbon neutrality policies and benefit from increased demand for electric vehicles and energy storage systems; (ii) reduce dependence on the price cycle of polysilicon and silicon wafer products and improve profit stability; and (iii) use the target company's R&D capabilities, production facilities and customer networks to create a new growth engine for the group.