Putailai plans to invest over 2 billion yuan of its own funds to build a factory in Malaysia!

To seize the rapid growth opportunities in the global new energy battery market, Putailai (603659) (SH603659, stock price 29.65 yuan, market value 63.344 billion yuan) has decided to establish a factory in Malaysia.

On the evening of March 11, Putailai announced that the company plans to invest in a lithium-ion battery anode material project in Gurun Industrial Park, Kedah State, Malaysia, through its wholly-owned overseas subsidiary. The project will have an annual production capacity of 50,000 tons, with a total planned investment not exceeding $297 million (approximately 2.051 billion RMB).

Image source: Putailai announcement

According to reports, this investment will be fully funded by the company’s own capital. While expanding overseas factories is strategically significant for supporting nearby customers and improving global supply chain layout, Putailai also acknowledged that the project still requires approval from multiple departments, with a construction period of up to 24 months. In the short term, it is not expected to have a significant impact on the company’s performance.

Image source: Putailai announcement

On the path of overseas expansion where opportunities and risks coexist, can Putailai realize its investment blueprint of over 2 billion yuan as scheduled?

Accelerating Southeast Asia Expansion, Investing 2 Billion Yuan to Serve Customers Nearby

According to Putailai, since 2025, the global new energy battery market has been developing rapidly. The terminal application markets, such as electric vehicles, energy storage, and new consumer electronics, continue to grow quickly, offering broad market prospects. Domestic and international new energy lithium battery manufacturers are increasing their overseas presence, especially in Southeast Asia, to seize market opportunities.

This move into Malaysia is a key step for Putailai to grasp overseas market opportunities and advance its internationalization strategy.

From an industry fundamentals perspective, expanding production abroad is supported by solid market demand. According to EVTank, China’s anode material shipments are projected to reach 2.922 million tons in 2025, a 38.1% increase year-over-year, with growth accelerating by 14.5 percentage points compared to 2024. In terms of shipment structure, the share of artificial graphite anode materials has increased to 86.9%, reaching 2.54 million tons.

The Daily Economic News reporter noted that for this investment, Putailai stated it aims “to seize opportunities in overseas markets, especially Southeast Asia, promote international development strategies, support nearby customers, and meet the needs of downstream clients and end markets.”

According to the announcement, Putailai plans to invest through its wholly-owned overseas subsidiary, Zichen Malaysia SDN. BHD., to build a project with an annual capacity of 50,000 tons of lithium-ion battery anode materials in Malaysia, with a total planned investment of $297 million (or equivalent in other currencies, approximately 2.051 billion RMB, final investment amount subject to actual expenditure and not exceeding $297 million).

The project will include the construction of production workshops and auxiliary facilities, procurement of various production equipment, and upon reaching full capacity, will produce 50,000 tons annually. The construction period is planned for 24 months. The total investment of about 2.051 billion yuan will be fully funded by the company’s own capital, demonstrating Putailai’s strong financial strength and commitment to going overseas.

Image source: Putailai announcement

Currently, the preliminary feasibility study and related due diligence for this project have been completed, and a framework investment agreement has been signed with relevant parties. The core logic behind the project is “serving customers nearby” and “supply chain coordination.”

Putailai explicitly stated that, in response to the capacity deployment and localization needs of key downstream customers in Southeast Asia, the project will enable near delivery to overseas factories, improving supply stability and response speed, reducing logistics costs, and strengthening customer loyalty.

Additionally, leveraging Malaysia’s geographical advantages and tariff agreements, the project can radiate to Southeast Asia and other overseas markets, further enhancing the company’s global supply chain service capabilities and supporting domestic capacity to serve the global market.

Furthermore, Putailai mentioned that the company has been deeply engaged in the field of anode materials for over ten years, building a complete technical system from raw material selection, granulation, carbonization, to graphitization. The mature technology and accumulated production experience will ensure rapid capacity construction in Malaysia, effectively shorten debugging cycles, and provide a solid foundation and guarantee for the smooth implementation of the project.

Policy and Cycle Challenges for the Project: When Will Capacity Dividends Materialize?

Despite the grand blueprint for overseas factory expansion, multinational investments are never without turbulence. Behind the over 20 billion yuan investment plan, Putailai faces multiple uncertainties and has clearly stated that short-term profits are unlikely to be significantly affected.

Putailai emphasized that the project still requires approval or filing from relevant Chinese government departments such as the National Development and Reform Commission, Commerce Department, and foreign exchange authorities, in accordance with local laws and regulations. The approval process and timing are uncertain risks.

Moreover, the 24-month construction cycle means “distant water cannot quench immediate thirst.” The company admits that the construction, commissioning, and operation of the project will take time, with certain uncertainties. Due to the project’s long development cycle, it is not expected to have a major impact on the company’s performance in the short term.

Besides time and approval risks, macroeconomic and geopolitical factors are also significant uncertainties. The company’s risk warning highlights that the project’s implementation is affected by local laws, labor policies, environmental regulations, tax systems, foreign exchange controls, and other legal factors, as well as international geopolitical tensions and trade frictions. Sudden changes in external conditions could severely hinder construction and subsequent operations.

Additionally, industry cycles and funding pressures are notable concerns. Putailai noted that the project requires substantial capital investment. The company currently has ample cash flow, and the project will be implemented in phases. However, if there are major adverse changes in investment, construction funding, credit policies, financing channels, or interest rates, there could be financial risks.

The Daily Economic News reporter observed that in the 2025 annual report, Putailai mentioned that under the global push for green and low-carbon economic transformation, the development of lithium batteries for new energy vehicles and energy storage has become a new market trend. Rapid market demand expansion has led power battery manufacturers and upstream supply chain companies to significantly increase capacity, intensifying market competition. If downstream automakers continue to pass cost pressures upstream, leading to further declines in lithium battery material prices, profitability could be adversely affected.

In the March 11 evening announcement, Putailai also noted that after the project’s completion, the company’s anode material capacity will further increase. If future industry growth or market demand faces major adverse changes, it could negatively impact the company’s operations and performance.

Image source: Putailai announcement

Cover image source: Meiri Media Library

(Edited by Zhao Yanping HF094)

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