Xinzhou Bang Files for Listing in Hong Kong! Leader in Electrolytes' Overseas Expansion, Capacity Expansion, and New Capital Strategy

Author / Tomato Under the Starry Sky

Editor / Spinach Under the Starry Sky

Typesetting / Wumei Under the Starry Sky

As the new energy industry chain accelerates its global restructuring, China’s leading electrolyte manufacturer #Xinyoubang (300037) has quietly taken a key step by officially submitting a listing application to the Hong Kong Stock Exchange.

As one of the earliest domestic companies to deploy lithium battery materials, Xinyoubang’s “A+H” dual-platform strategy not only aims to open up international financing channels, but also reflects its strategic intent to respond to industry cycle fluctuations, accelerate overseas capacity deployment, and reshape global supply chain discourse. In the current environment of overcapacity concerns and technological iteration pressure, whether this strategic move can succeed remains to be further validated by the market.

1. Performance Under Pressure, Seeking New Growth

Founded in 2002 and headquartered in Shenzhen, Xinyoubang has formed three main business segments: battery chemicals, organic fluorochemicals, and electronic information chemicals.

Among them, lithium-ion battery electrolyte core business contributes over 60% of revenue, making it the company’s “ballast.” As of September 30, 2025, Xinyoubang has established 31 innovation platforms and owns 14 production bases worldwide.

Main achievements excerpted from the “Prospectus”

However, affected by factors such as the subsidy cuts for new energy vehicles, inventory reduction of power batteries, and falling electrolyte prices, this core engine has faced severe challenges in recent years. The “Prospectus” shows that from 2023 to September 2025, Xinyoubang’s revenue was 7.472 billion yuan, 7.836 billion yuan, and 6.607 billion yuan respectively, with net profits of 1.014 billion yuan, 951 million yuan, and 772 million yuan in the same periods.

Overall Operating Performance excerpted from the “Prospectus”

During the reporting period, revenue and net profit remained relatively stable, but the average selling price of main products generally declined. The gross margin of battery chemicals dropped from 15.7% in 2023 to 9.1% by September 2025, a decrease of over 40%, reflecting the brutal reality of the industry’s “volume growth and price decline.”

Against this backdrop, Xinyoubang urgently needs to develop a second growth curve, and listing in Hong Kong provides an important strategic support.

2. Strategic Push, Heading to Hong Kong Stocks

Xinyoubang has been early in its globalization efforts. As early as 2018, it established a subsidiary in Poland, planning to build an annual 40,000-ton lithium-ion battery electrolyte plant, along with 5,000 tons of NMP and 5,000 tons of conductive paste; additionally, there are capacity plans in the Netherlands, the US, and other regions, with total overseas investment reaching billions of yuan.

Overseas Capacity Construction excerpted from public sources

However, these overseas deployments require securing raw materials in advance and building local teams, which place high demands on the company’s cash flow. The Hong Kong market’s high acceptance of manufacturing overseas projects and its fast approval process can provide more flexible and lower-cost capital support.

Besides capital needs, listing in Hong Kong can significantly enhance the company’s international recognition, helping it to connect with global top-tier clients. Although Xinyoubang is already a core supplier for international battery giants like LG Energy Solution, Samsung SDI, and SK Innovation, its brand visibility in European and American capital markets still lags behind its Japanese and Korean peers. Through Hong Kong listing, Xinyoubang can leverage international roadshows, ESG disclosures, analyst coverage, and other mechanisms to systematically showcase its technological strength and sustainable development story, strengthening its image as a “Global Tier 1 Material Supplier.” This not only helps consolidate existing customer relationships but also facilitates deeper integration into North American and European supply chains that are not yet fully tapped.

Of course, the road to Hong Kong listing is not without challenges.

3. Risks and Challenges Remain

The company is currently in a critical phase of transitioning from “cyclical growth” to “technology-driven.” While demonstrating strong competitiveness in high-value-added fields like organic fluorochemicals, it faces industry cycle fluctuations, technological uncertainties, and intense competition, making its future development full of challenges.

In the first half of 2025, the electrolyte industry experienced the most intense price war in nearly three years, with an average gross profit of only 374 yuan/ton, down 82.7% year-on-year. Although signs of recovery appeared in the second half, overcapacity remains a concern. Global electrolyte capacity has reached 6 million tons, while demand is only about 2.6 million tons, meaning the utilization rate may stay low for a long time. This industry characteristic puts long-term profitability under pressure, with return on net assets dropping from 10.2% in 2023 to around 7.16%, weakening capital efficiency.

The uncertainty of technological routes is another major challenge. The rapid development of solid-state batteries could impact traditional electrolyte demand. Although the company has invested in New Source Bang Technology, covering oxide, sulfide, and polymer systems, its industrialization progress remains to be seen.

Meanwhile, the fluorinated liquid business, which the company mainly develops, has a broad market prospect with a gross margin exceeding 60%, but in the first half of 2025, this business accounted for only 16.26% of revenue, making it difficult to offset the decline in other business margins. In R&D, by the end of September 2025, R&D expenses reached 360 million yuan, a 30.98% increase year-on-year, but balancing short-term profitability with long-term technological investment remains a challenge.

Gross Margin Data excerpted from the “Prospectus”

Additionally, the company’s financial situation reflects certain internal management challenges. As of September 2025, trade receivables reached 3.007 billion yuan, a 22.39% increase from 2024, accounting for 389.5% of net profit. This indicates the company needs over three years of net profit to cover these receivables, highlighting cash collection and working capital pressures amid fierce market competition.

Trade Receivables Data excerpted from the “Prospectus”

Xinyoubang’s move to Hong Kong IPO aims to build a “A+H” dual-capital platform to support its globalization. While this strategic layout can enhance long-term competitiveness, whether the company can successfully achieve technological breakthroughs and improve capacity utilization remains uncertain. As industry competition evolves and technological routes continue to change, Xinyoubang must consolidate its existing advantages and break through core business bottlenecks to remain steady in a volatile market environment.

Note: This article does not constitute any investment advice. The stock market involves risks; invest cautiously. No trading, no harm.

Author’s statement: Personal opinions are for reference only.