𝛼SKAobo Environmental Technology Ltd: Delivering Battery Storage Solutions
Aobo Environmental Technology Ltd
Delivering battery storage solutions
Aobo Environmental Technology Ltd listed on the NSX on 2nd December raising $5m. The Australian domiciled company acquired the established Chinese operation for shares resulting in a transfer of domicile with major shareholders unchanged. Aobo has two business divisions – Air Treatment Solutions (ATS) and Energy Storage Systems (ESS). Air treatment is Aobo’s established business with a focus in providing dehumidification and emissions treatment for food, pharmaceutical, electronics and lithium-ion battery production. Aobo’s move to an Australian listing has been prompted by the company’s strategy to manufacture battery storage systems (ESS) aimed at the growing demand for residential solar power units in Australia. Installing battery storage is a clear value add for users of small-scale solar power generation. Aobo expects significant retrofitting of existing solar power units (over 2m installed household in Australia) will drive battery uptake as well as continuing expansion of solar cell installations.
Business model
Aobo sells custom ATS solutions and equipment direct to manufacturers for dehumidification and air purification during the manufacturing process. Emissions treatment in battery manufacture has more recently become a key product area. ATS revenue from both dehumidification and abatement of volatile organic compounds in Lithium-Ion battery manufacture now provides 65% of revenue. The company was founded in Wuxi City, China in 1999 with the first ATS sale to Johnson & Johnson (Shanghai) followed by sales to Chinese and Internationally owned manufacturing operations. Aobo developed and patented a range of ATS devices and processes and has achieved relevant international manufacturing quality certifications. First ATS sales outside China were in 2010-11. Product R&D in ESS commencing in 2017. ESS products were launched for sale in Australia in 2018 with the company becoming a member of the Australian Clean Energy Council in 2019 and Australian and International product approvals were also awarded in 2019. Aobo has appointed Australian distributors for both ATS and ESS systems.
Recent News
Aobo listed on the NSX on 2nd Dec 2020 following a lengthy capital-raising process in 2020, complicated by the COVID pandemic. Aobo was forced to reduce promotional efforts while travel was restricted in China and internationally from December quarter 2019. The year to Dec 2019 saw a profit slump followed by a recovery “to a more normal status” in the half year to June 2020 as restrictions were eased in China. Aobo’s new manufacturing facility will allow production of ESS to be moved in-house and at the end of November was nearing completion. Funds raised will not be used to finance this facility. Bank debt levels have declined from RMB 33m to RMB 28m at November 2020.
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