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Announcement of the execution of a letter of intent to enter into a business collaboration and establish a joint venture with Shenzhen Desay Battery Technology Co., Ltd.

December 22, 2020

TDK Corporation (President and CEO: Shigenao Ishiguro) announces that TDK's wholly-owned subsidiary Navitasys Technology Limited (Hong Kong Special Administrative Region of China, hereinafter “NVT HK”), which engages in the package business of rechargeable battery, signed a letter of intent with respect to discussing a potential business collaboration, including the establishment of a joint venture with Shenzhen Desay Battery Technology Co., Ltd.(Guangdong, China, hereinafter “SZ Desay”), which manufactures and sells the package of rechargeable battery. It is planned that the maximum shareholding ratio of NVT HK will be 49% and the remaining will be owned by SZ Desay. The joint venture will be Huizhou Desay Battery Co., Ltd. (Guangdong, China), which is currently a wholly-owned subsidiary of SZ Desay prior to the formation of joint venture.

This business collaboration aims to strengthen the cooperative relationship between both companies through a joint venture in the rechargeable battery package business and further strengthen product competitiveness in this field.
From now, both companies will discuss the transaction details, including the consideration to be paid for the joint venture shares in the future. This letter of intent is not legally binding and the business collaboration will only be implemented if a formal agreement is reached through discussion by the parties and upon the completion of satisfactory due diligence by both companies. It will be disclosed promptly as soon as it is decided to conclude a formal agreement.

Overview of TDK’s subsidiary

(1) Name Navitasys Technology Limited
(2) Location Hong Kong Special Administrative Region of the People’s Republic of China
(3) Representative Yee ChunKeung (General Manager)
(4) Business Manufacture and sale of rechargeable battery packages
(5) Capital US$ 10,000,000

Overview of the other party to conclude the letter of intent

(1) Name Shenzhen Desay Battery Technology Co., Ltd.
(2) Location Guangdong, China
(3) Representative Liu Qi (Chairman)
(4) Business Manufacture and sale of rechargeable battery packages
(5) Capital RMB 207,197,738 (about 3,200 million Japanese yen)
(6) Date of establishment 4th September, 1985
(7) Large shareholders and shareholding ratio
(As of 30th June, 2020)
Guangdong Desay Corporation (44.80%)
Central Huijin Asset Management Ltd. (3.39%)
Zhong Ou AMC of ICBC (3.18%)
Hong Kong Securities Clearing Company Limited (2.47%)

Overview of a company planning to become a joint venture

(1) Name Huizhou Desay Battery Co., Ltd.
(2) Location Guangdong, China
(3) Representative Zeng Jianyun (Chairman)
(4) Business Manufacture and sale of rechargeable battery packages
(5) Capital RMB 700,000,000 (about 10,700 million Japanese yen)
(6) Date of establishment 22nd October, 2002
(7) Equity ratio (planned) The maximum shareholding ratio of NVT HK will be 49% and the remaining will be owned by SZ Desay.

※Currency exchange rate is 15.22 Japanese yen / 1RMB.

(Reference) TDK’s Consolidated Forecasts for the Fiscal Year Ending March 31, 2021 (as of October 30, 2020) and Results for the Previous Fiscal Year

(Yen million) Net sales Operating income Income before income taxes Net income attributable to TDK
Forecasts for the year ending March 2021 1,400,000 110,000 111,000 76,000
Results for the year ended March 2020 1,363,037 97,870 95,876 57,780

Contacts for media

Contact Phone Mail
Mr. Kazushige ATSUMI TDK Corporation
Tokyo, Japan
+81 3 6778-1055 TDK.PR@tdk.com

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