Hey guys, sorry for the late update as I was travelling overseas for holidays last week.
On 23.10.2018, JRO released a number of announcements regarding its restructure plan and investor who will help them with the debt crisis. Again, I am not going to translate all the documents as they are many, here are some highlights what I obtained from these announcement.
1. JRO owned subsidiary company JR "Li Tong" (JRLT) will form a joint venture with other four parties. JRLT will invest 500K RMB and other four parties will invest 10 million RMB each, total 50.5 million RMB for the new company. This investment will help Shanxi Optimum to resume its production.
2. One of the investors was revealed who is Tianjin Jinping. This company has 15 years of history to make batteries. Their customer are major players in battery area, one of the example is Samsung.
3. Meanwhile, there will be another potential investor, which was not revealed yet, appointed by Jinping later on to participate JRO's restructure in the future. Meanwhile, Jinping will help JRO modify its production line for higher standard products.
Back in 16.10.2018, the "Sliver Group" act was not passed based on the vote outcome. People in China actually thought it was good because if the act was passed, then, the banks will take control of JRO and the investor will not be happy and cease the cooperation with JRO i.e., no investment to help JRO.
It seems correct. Because the investors were partially revealed after few days JRO declined the banks. Please be noted that Jinping actually is a joint venture between a local high tech company and Samsung. It is very natural to think Jinping actually is a reconnaissance of Samsung before Samsung reveal its full commitment to JRO to help and save them if the deal progresses.
People in China analyse that the reasons behind this deal is because Samsung wants to penetrate the EV market in China. However, it was a foreign company so there are a lot of compensation that Samsung cannot enjoy. As a result, Samsung cannot compete with local suppliers fairly in China. While by forming the joint venture or just getting shares of JRO, Samsung's products (branded as JRO) will be entitled to enjoy these policy as JRO is already in the compensation list as well as the sales channel already established by JRO.
For now, these are quite positive news for JRO. But we still need to wait and see the final outcome. Hope one day there will be an announcement from AJM saying our ship is sailing to JRO. Today, we took a hit but I saw great support from the people who long AJM. I just want to show you my gratitude. After all, it is all about money. If we keep mining the lithium and start getting cash in the bank, there will be no reason for sp to stay low. All we need is patience and good luck holders!
AJM Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
