On the evening of August 14, Zhongheng Electric announced that its controlling shareholder, Hangzhou Zhongheng Technology Investment Co., Ltd. (hereinafter referred to as "Zhongheng Investment"), along with its shareholders Zhu Guoding and Bao Xiaoru, officially signed transaction documents such as the Capital Increase Agreement and Shareholder Agreement with CATL. CATL plans to subscribe for 14.4118 million yuan in newly increased registered capital of Zhongheng Technology at approximately 4.1 billion yuan. On the same day, the two parties also signed a Strategic Cooperation Agreement.

CATL excels in product development and investment. For CATL, which earns over 200 million yuan daily, 4.1 billion yuan will not pose a significant burden. However, a closer look at the funding sources and shareholding methods, along with a review of events over the past three years, reveals that CATL has always had a grand strategy with ample contingency plans.

This is precisely what is meant by making strategic moves and seizing opportunities.

4.1 Billion: A Clever 'Indirect Shareholding'

True decisiveness often does not rely on rumors but on grand gestures—simply buying outright.

First, it must be clarified that CATL is not directly acquiring shares in the listed company Zhongheng Electric but rather in its controlling shareholder, Zhongheng Investment.

After the transaction is completed, CATL will hold a 49% stake in Zhongheng Investment, thereby indirectly holding approximately 7.42% of the shares in the listed company Zhongheng Electric and becoming its second-largest shareholder. Zhu Guoding and Bao Xiaoru, a couple, will collectively hold 51% of the shares and remain the actual controllers.

This method of 'indirect shareholding' is quite ingenious. Without seeking control, CATL, as a strategic investor, will gain one seat on the board of directors of Zhongheng Technology Investment and the right to nominate one deputy general manager of the listed company, one financial department manager, and one candidate for the board of directors of the listed company. This structural design bypasses the cumbersome procedures of direct shareholding in a listed company, achieving strategic synergy at a low cost.

In terms of funding, CATL did not pay entirely in cash but used approximately 99.7% of the equity of its subsidiary, Times Tianyuan (Shenzhen) Technology Co., Ltd., valued at nearly 1.2 billion yuan, with the remaining approximately 2.9 billion yuan paid in cash. This 'equity plus cash' approach not only reduces direct cash pressure but also indicates CATL's intention to deeply integrate its technological capabilities with those of Zhongheng Electric.

The two parties agreed that the shares held cannot be transferred for 60 months after the closing—a five-year lock-up period uncommon in industrial investments. Typically, the lock-up period for strategic investments ranges from 12 to 36 months. A five-year period means that both CATL and Zhongheng Investment have abandoned the possibility of short-term arbitrage.

For CATL, which earns over 200 million yuan daily, the cash expenditure of 4.1 billion yuan is not a burden. The real cost is time: over the next five years, both parties must work together to grow the pie. Otherwise, this investment cannot be liquidated through the secondary market or easily revalued on the books.

What CATL seeks is not financial returns but a strategic partner capable of deep collaboration and co-evolution.

What Exactly Is Being Purchased?

1. HVDC Technology: The 'New Heart' of AI Data Centers

Zhongheng Electric's core asset is its leading position in the high-voltage direct current (HVDC) power supply system field.

With the explosive growth of AI large models, the power density per cabinet in smart computing centers has surged to 100kW or even MW levels. Traditional UPS power supply solutions, due to multiple AC-DC conversions, result in high energy consumption and low efficiency, making them unable to meet the power supply demands of high-density computing scenarios.

The advantage of HVDC lies in its end-to-end efficiency of over 97.5%, far surpassing traditional UPS solutions, with a more compact system structure that effectively reduces construction and operational costs. At the GTC conference in early 2025, NVIDIA officially brought HVDC to the forefront of the industry, defining it as 'future-oriented AI infrastructure.'

What is Zhongheng Electric's position in the domestic HVDC field?

Market Share Leader: Consistently ranks first in domestic HVDC market share.

Standard Setter: Leads the formulation of national standards for DC power supply systems in information and communication.

Deeply Bound to Top Clients: Holds nearly 70% of the HVDC share in Alibaba's data centers and has jointly advanced the Panama power supply solution with Alibaba, which has been implemented on a large scale.

NVIDIA Supply Chain: Selected in 2025 as a key partner for HVDC power supply solutions at NVIDIA's GTC conference and became a core Adaptation (compatible) manufacturer for the 800V DC architecture white paper.

These are precisely the 'tickets' that CATL has been eager to obtain.

2. Integration of Times Tianyuan: Addressing PCS Shortcomings

Times Tianyuan (formerly Xianyang New Energy), the equity stake used in this transaction, is itself an important layout (layout) by CATL in the power electronics field.

Times Tianyuan focuses on the research and application of energy storage bidirectional converters (PCS) and AC-side system integration technologies. In October 2024, it completed a significant capital increase, raising its registered capital from 5 million yuan to 495 million yuan.

Times Tianyuan specializes in the AC side (PCS), while Zhongheng Electric excels in the DC side (HVDC). Their combination allows CATL to possess a complete capability chain from battery cells to system integration.

3. The 'Last Mile' of Computing-Power-Electricity Synergy

This is the core strategic intent behind CATL's acquisition.

CATL is the global leader in power batteries and energy storage, possessing top-tier capabilities in energy storage cells and green power solutions. However, it lacks the power conversion and integration capabilities deep into the data center endpoints. Zhongheng Electric's HVDC technology and power informatization capabilities precisely fill this gap.

Together, the two parties can collaboratively address core pain points such as green power adaptation, peak-shaving regulation, and energy storage scheduling in AI smart computing centers, jointly creating a full-link zero-carbon solution from 'green power production-energy storage-efficient power supply-computing power consumption.'

4. Outbound Channels: Opening the Door to Global Markets

Zhongheng Electric is not only strong domestically but has also initiated international layout (layout).

In September 2025, Zhongheng Electric established a joint venture with NASDAQ-listed company SuperX AI in Singapore to launch HVDC solutions globally. The gross profit margins for overseas HVDC projects generally hover around 40%, compared to only 20%-30% domestically.

By acquiring a stake in Zhongheng Electric, CATL not only gains technology but also a channel to the global AI data center energy market.

A Three-Year Chess Game

This transaction is not an isolated event. When placed within CATL's strategic evolution over the past three years, the company is steadily building a zero-carbon ecosystem covering the entire chain of 'generation, storage, transmission, distribution, and consumption.'

In 2023, CATL announced its 'Zero-Carbon Strategy,' declaring its goal to achieve carbon neutrality in core operations by 2025 and across the entire value chain by 2035, sending a clear signal to the outside world: CATL is shifting from 'selling batteries' to 'selling zero-carbon solutions.'

Starting in 2024, CATL began to layout (layout) 'zero-carbon city' collaborations. The most iconic example is its joint creation with Dongying City, Shandong Province, of the nation's first zero-carbon industrial park with 100% green power supply, transforming 'zero carbon' from a concept into a replicable physical model.

From 2024 to 2025, CATL appeared in seemingly unrelated industries—collaborating with Kweichow Moutai on zero-carbon solutions for Baijiu production, exploring green logistics with DHL, and promoting low-carbon transformation with Nanjing Iron and Steel. Wherever there is energy consumption, there is a place for CATL's zero-carbon solutions.

In 2026, CATL acquired a stake in Zhongheng Electric. The first three steps were about 'selling solutions'; this step is about 'building systems.' CATL is no longer just helping others save electricity but is constructing an intelligent scheduling network between computing power and electricity through Zhongheng Electric's HVDC and power software capabilities, upgrading from an equipment supplier to a participant in the operation of energy systems.

Concerns Beneath the Feast

Of course, this transaction also carries risks that cannot be ignored.

Historical issues of the actual controller. In December 2025, Zhu Guoding, the actual controller of Zhongheng Electric, was sentenced to three years in prison with a four-year probation for manipulating the securities market and fined one million yuan.

In addition to the criminal judgment against the actual controller, public information shows that Zhongheng Electric and its subsidiaries are involved in multiple sales contract dispute cases. Previously, Zhu Guoding and his wife were also repeatedly penalized by regulators for Illegal reduction of holdings (illegal share reductions) and newsjacking (hype-chasing) behaviors.

Industry competition is intensifying. The high growth prospects of the HVDC sector have attracted numerous giants such as Huawei and Delta to enter the fray, leading to sustained fierce competition. It is estimated that the global AIDC external power supply market is expected to reach 271 billion yuan by 2030, with the HVDC market growing at a compound annual rate of approximately 80%. Whether Zhongheng Electric can hold its ground amidst the siege by industry giants will determine whether its valuation logic can persist.

Returning to the original question: What exactly did CATL purchase for 4.1 billion yuan?

It bought not just equity in an HVDC leader but also a 'ticket' to the AI computing power era, a key piece to complete the 'last mile' of its zero-carbon ecosystem, and a strategic pivot point for its transformation from a battery manufacturer to a comprehensive energy solution provider.

As the 2026 government work report has already listed 'computing-power-electricity synergy' as a core component of new infrastructure, CATL's move is a bet on the certain future of the integration of the digital economy and new energy.

As for whether the 4.1 billion yuan was well spent, the market and time will provide the answer.