Nexgram Group entering Strategic Cooperation Framework Agreement with Shanghai Zhida New Energy Automobile Public Support Development Co, Limited [13 Apr 2018]

The Board  of Directors of the Nexgram Holdings Berhad (‘the Company’ or ‘Nexgram’) wish to announce that on 12 April 2018, Nexgram Industries Sdn Bhd, a wholly owned subsidiary of the Company had entered into a Strategic Cooperation Framework Agreement (“SCFA”) with Shanghai Zhida New Energy Automobile Public Support Development Co, Limited, a subsidiary company of Shanghai Zhida Science and Technology Development Co., Ltd. (“ZHIDA GROUP”), for distributorship and joint venture in electronic vehicle (EV) charging products and services in South East Asia. Malaysia will be a sole distribution hub. Since this is the new technology introducing into South East Asia’s market, as such, both parties agreed that it will not fix any cut of date on the expire of SCFA. Nevertheless, should both parties has derived the agreeable terms and conditions in signing of the distributorship and joint venture agreement. Nexgram shall make the immediate announcement upon execution of the said agreement.

The SCFA has specifically covered the cooperation in carry out all-round operations in the field of localised implementation of technology and resources in new energy automotive industry, such as smart travel hardware and national Internet high-tech products, urban electronic vehicle (EV) charging platform, EV master planning and operation, and the business of smart-vehicle networking intelligent hardware, research and development which includes electronic vehicle, unmanned driving technology, and shared car economy industrial chain.

Zhida Group is based in Shanghai, China with sound sales support system and a strong production capacity in EV chain of products. With the SCFA, both parties shall further ink technology transfer, products research and development, distributions, projects joint venture, maintenances & supports, and other strategic partnership co-operations in Southeast Asia countries, starting from Malaysia being the main distribution hub for the region.

Zhida Group established in November, 2010 by a group of elites from Automobile industry, such as VW and GM, and IT world such as IBM. Zhida Group has become No.1 EV home charging service provider in China. Zhida Group service includes EV charger installation, EV charger maintenance, and charger development, with industry leading clients such as Volvo, SAIC, JAC, Nissan, Porsche and SVW. Zhida Group qualification includes ISO9001 for Technical Service for Mechanical Device, Development and Service for Computer Software; “Electric Vehicle Ready Company” certification by TÜV Rheinland; TS16946 certification for Charger Production line (Note 1).

Electric vehicles use one or more than one electric motors or traction motors for propulsion. The electric vehicles are powered either by a collector system through electricity from charging station deployments or can be charged by self-charging devices such as regenerative braking systems, turbochargers, etc. It also forecast the International electric vehicle charging infrastructure market worth of USD45.59 billion by 2025. (Note 2)

Globally, the new registrations of electric cars increased by 70% from 2014 to 2015. In 2015, over 550,000 vehicles were sold globally which includes both battery electric vehicle and plug-in hybrid electric vehicle. China surpassed the U.S. as the largest market for electric cars in 2015, with over 200,000 new registrations. Both these markets accounted for more than half of the global new electric car registrations in 2015. China is a potential market for electric vehicles, as it has the maximum number of electric vehicles globally. As per the Global EV Outlook 2015, China has a population of 230 million electric bikes, 83,000 electric cars, and 36,500 electric buses. Toyota Motor Corporation and Tesla Motors, Inc. are prominent players regularly manufacturing electric vehicles. For instance, Tesla Motors, Inc. added Model S, the fastest electric car to the global automotive fleet.

The demand for electric vehicles is governed by increase in demand for fuel-efficient, high-performance, and low-emission vehicles. In addition, the trend of reduction in vehicular emission due to stringent rules & regulations in several countries and growth of public charging infrastructure in China, France, Norway, and the other developed countries. However, high manufacturing cost of electric vehicles and low fuel economy & serviceability restrain the market growth. Moreover, technological advancements in electric vehicles and proactive government initiatives are expected to unfold various opportunities for the growth of the stakeholders of this market, such as system integrators, vehicle manufacturers, engine manufactures, and component providers, in the near future. (Note 3)

The injection of investment at RM10.0 million being Nexgram holds at 85% and Zhida Group holds at 15%, and the injection of capital over a period of time. The SCFA is binding agreement by both parties, it should be maintained strictly confidential. No parties are allow to discuss with any third party on the matter unless obtain full consent by the other party, or unless the SCFA has been fully terminated.

Nexgram Holdings Bhd is a diversified investment holding company in telecommunication, software, surveillance, real estate, and infrastructure business investment. The Company long-term strategic business representatives in South East Asia, especially in Indonesia, Thailand, Philippines, Vietnam, and Malaysia, provides ready access for Zhida Group South East Asia expansion plan.

None of the Directors, Substantial or Major Shareholders of Nexgram and/or any persons connected to them have any direct or indirect interest in the SCFA.

The SCFA is not expected to have a material effect on the earnings per share, Net Assets (“NA”), NA per share and gearing of the Group for the financial year ending 31 July 2018.

Source & References (Notes):

1.                  http://www.shzhida.com

2.                  https://www.grandviewresearch.com/press-release/global-electric-vehicle-ev-charging-infrastructure-market

3.                  https://www.alliedmarketresearch.com/electric-vehicle-market

This announcement is dated 13 April 2018