Farasis Energy’s 2021 net loss forecasted to widen to 1.1 billion yuan

Shanghai (Gasgoo)- Farasis Energy (Ganzhou) Co., Ltd. (called “Farasis Energy” for short) forecasted on Jan. 29 a net loss of 800 million yuan ($125.76 million) to 1.1 billion yuan ($173 million) attributable to shareholders for the year of 2021, representing a year-on-year surge of 141.69% to 232.32% compared to the net loss recorded in 2020.

Excluding the impact of non-recurring gains and losses, Farasis Energy's annual net loss is likely to be 1.1 billion yuan to 1.4 billion yuan ($220.081 million) in 2021, versus a net loss of 542,397,800 yuan ($85.265 million) for the previous year.

Photo credit: Farasis Energy

Despite the widened net loss, Farasis Energy will still gain remarkable growth in full-year revenue, according to the company statement.

The power battery maker attributed the widened net loss in 2021 to such factors as lower product prices and the increase in prices of main raw materials, R&D investment, and amortization of equity incentive expenses.

The company noted prices of its battery products remained at a relatively low level partly due to the general downward movement in average industrial price of power batteries. When the company negotiated with clients in 2020 for next year’s product prices, it agreed lower prices given the raw materials prices and market trend of that moment. Besides, to maintain sound partnerships with clients, the battery maker offered some discounts to deepen cooperation.

Moreover, prices of main raw materials like cathode material, anode material, and electrolyte all rose in 2021, pushing the company’s business performance down as well.

The increase in R&D investment was also a factor leading to the larger net loss. However, Farasis Energy said it will continue to vigorously invest in R&D of solid-state battery, thermal runaway management, and other fields in 2022 to keep an industry leading R&D level.

In addition, the company last year launched a restricted equity incentive plan to strengthen the development of talent pool, which led to expense increase as well.