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On November 7, Shida Shenghua issued a announcement stating that its wholly-owned subsidiary, Shenghua New Energy Technology, plans to invest 1.6 billion yuan in building a project for the production of 300,000 tons per year of electrolytes. On the same day, Shida Shenghua disclosed that its 51%-owned subsidiary, Shenghua New Energy, plans to build a liquid lithium salt production facility with an annual capacity of 100,000 tons, with a total investment of 560 million yuan. The announcement states that the construction period for both projects is 15 months, with completion and operation expected in February 2023. Once the liquid lithium salt project is fully operational, it will be able to generate annual revenue of 3.48 billion yuan; once the electrolyte project is operational, it will bring in an additional 9.56 billion yuan in annual revenue. Public information shows that Shida Shenghua holds a market share of up to 40% in the market for electrolyte solvents, and it serves as a supplier of high-quality raw materials for numerous lithium-ion battery manufacturers both domestically and internationally. It is understood that the company currently focuses on its series of carbonate solvent products as well as lithium battery materials as its main business areas. It has established industrial facilities in Dongying, Jining, and Quanzhou, and is planning to build an integrated lithium battery materials production facility in Wuhan to meet the demands of the central and western regions of China. Shenghua New Energy Technology, which plans to undertake this 300,000 tons per year electrolyte production project, specializes in carbonate-based products as well as methyl tert-butyl ether-based products. In 2020, Shenghua New Energy Technology achieved revenue of 2.966 billion yuan, of which carbonate-based products accounted for 50.45% of this amount. The announcement states that the main raw materials for this project are sourced from Shenghua New Energy Technology’s existing facilities, as well as its new energy and new material subsidiaries; compounds such as carbonates and liquid lithium salts are supplied to the project’s facilities via pipelines. Shida Shenghua stated that, as a manufacturer of electrolyte raw materials, the company currently does not engage in the production or sale of electrolytes; this investment marks its first entry into the downstream electrolyte production sector. The four main components of lithium batteries are the cathode, anode, separator, and electrolyte. The electrolyte is composed of three materials: a solvent (carbonate-based substances, accounting for over 80%), a lithium salt (lithium hexafluorophosphate), and additives (such as VC and FEC). Driven by the rapid development of the downstream new energy vehicle industry, the demand for lithium battery materials continues to rise. Relevant institutions predict that in 2025, global demand for lithium-ion batteries will exceed 2 TWh, driving the total demand for electrolyte to surpass 2.5 million tons. Regarding the investment in the liquid lithium salt project, Shida Shenghua stated that due to the huge market demand and favorable development prospects for new energy vehicles and energy storage, the demand for liquid lithium salts will increase year by year, thus ensuring stable demand for the products of this project.