CATL (宁德时代) Takes Strategic Stake in Zhongheng Electric (中恒电气), Eyes Data‑centre Power Play

Deal and governance

Contemporary Amperex Technology Co., Limited (CATL) (宁德时代) said it will make a strategic equity and cash investment in Zhongheng Technology Investment (中恒科技投资), the controlling shareholder of listed Zhongheng Electric (中恒电气). Under a framework agreement announced by Zhongheng Electric, CATL will subscribe roughly RMB 4.1 billion for new capital in Zhongheng Technology Investment and, by contributing its 99.7% stake in Times Tianyuan (时代天源) as part of the consideration, will take about 49% of the target’s equity — becoming an indirect shareholder of Zhongheng Electric. Control of the listed company does not change: founder Zhu Guoding (朱国锭) will remain the ultimate controller, but CATL will gain governance influence, with the right to recommend one director and one deputy general manager to the listed company.

Strategic rationale

Why is China’s battery champion paying up for a power‑systems and digital energy firm? Zhongheng Electric bills itself as a digital energy company focused on zero‑carbon infrastructure and has built capabilities in high‑voltage DC (HVDC) power for data centres, power electronics and integrated energy systems — areas that dovetail with CATL’s push into “zero‑carbon” businesses beyond batteries. CATL’s Times Tianyuan unit, a provider of power conversion and storage electronics, complements those offerings. The companies say they will collaborate on green ICT infrastructure, electrified transport and new power systems (including computing‑power and electricity coordination).

Risks, market reaction and geopolitical context

The deal comes as Zhongheng Electric faces operational headwinds: it reported revenue growth without profit gains last year, slipping gross margins and rising leverage. Founder Zhu was also convicted and given a suspended sentence for securities market manipulation — a legal cloud investors will watch. Market response has been upbeat: Zhongheng’s shares rose sharply year‑to‑date and the company’s market value approached RMB 20 billion after the announcement. It has been reported that online rumours tying Zhongheng to Nvidia, Meta or Google were not accurate, and the company has denied any signed contracts with those overseas cloud vendors. Against a backdrop of US‑China trade frictions and export controls on advanced technologies, Chinese players are accelerating vertical integration of data‑centre and energy stacks — a strategic shift that helps explain why a battery maker would step into power‑infrastructure for hyperscale computing.