On January 27, 2026, Shenzhen Capchem Technology Co., Ltd., a leading global electrolyte producer, submitted its listing application to the Hong Kong Stock Exchange, planning an IPO on the Hong Kong market. The funds raised from this Hong Kong IPO are intended for building overseas production capacity, with additional plans to expand domestic electrolyte production facilities.
It is noteworthy that a significant number of A-share companies have been seeking listings in Hong Kong over the past two years, resulting in a backlog of over 400 firms awaiting hearing sessions for their Hong Kong IPOs. Consequently, whether Capchem will successfully pass the hearing remains uncertain.
Due to higher profitability overseas, many electrolyte manufacturers are accelerating their international expansion. If the waiting period for a Hong Kong listing becomes prolonged, securing funds through alternative channels to finance overseas capacity expansion will be crucial for Capchem to capture market share abroad.
Against the backdrop of a gradual recovery in electrolyte prices and the approaching large-scale application of solid-state batteries, can Capchem, the world's second-largest electrolyte producer, seize the opportunity to drive further corporate growth?
1. Electrolyte Prices Surge, But Profit Performance Lags Far Behind Tinci Materials
After several consecutive years of decline, electrolyte prices finally began to rebound in the second half of 2025.
According to statistics from the Guangdong Battery Association, the average price of lithium hexafluorophosphate (LiPF6), a core electrolyte material, was only 49,000 yuan per ton in July 2025. By December 2025, the price had risen to 180,000 yuan per ton.
The price recovery of LiPF6 is largely linked to a surge in demand for energy storage batteries. In recent years, continuous increases in installations of wind and photovoltaic power have heightened the need for energy storage to balance peak loads. Energy storage markets across Europe, the Americas, Australia, Asia, Africa, and Latin America have all shown accelerated growth.
Data released by SNE Research indicates that global energy storage battery shipments reached 550 GWh in 2025, a year-on-year increase of 79%. Particularly in the second half of 2025, energy storage battery installations remained robust.
Against this backdrop of strong downstream demand, both the sales volume and prices of electrolytes, a key raw material for energy storage batteries, have risen significantly. Consequently, the profitability of electrolyte manufacturers has been steadily recovering, including for global leader Capchem.
For the first three quarters of 2025, Capchem reported a return to positive growth in net profit attributable to shareholders after two consecutive years of decline. Data shows that during the first nine months of 2025, Capchem achieved operating revenue of 6.616 billion yuan, up 16.75% year-on-year, with net profit attributable to shareholders of 748 million yuan, an increase of 6.64%.
Notably, Guangzhou Tinci Materials Technology Co.,Ltd., the world's largest electrolyte producer, released its annual earnings forecast, projecting a net profit attributable to shareholders between 1.1 billion and 1.6 billion yuan for the full year 2025, representing growth of 127.31% to 230.63% compared to the previous year.
For the first three quarters of 2025, Tinci's net profit attributable to shareholders was only 421 million yuan, implying a fourth-quarter profit ranging from approximately 680 million to 1.18 billion yuan.
Amidst the exceptionally strong fourth-quarter performance of its peer, Capchem's own fourth-quarter results were less impressive. On February 11, Capchem released its preliminary earnings report.
Data revealed that the company achieved total operating revenue of 9.639 billion yuan for the full year 2025, a year-on-year increase of 22.84%, with net profit attributable to shareholders of 1.098 billion yuan, up 16.56%. However, the fourth-quarter net profit was only around 350 million yuan, an increase of less than 90 million yuan from the 264 million yuan profit in the third quarter, significantly lagging behind Tinci's performance.
The primary reason for this substantial disparity lies in the proportion of self-supply for the core electrolyte material, LiPF6. Tinci's self-supply ratio exceeds 95%, whereas, according to disclosures in Capchem's investor Q&A, the company's self-supply ratio ranges from 50% to 70%.
Therefore, when LiPF6 prices surged in the fourth quarter, Tinci was able to fully benefit from the price increase. In contrast, Capchem had to purchase a portion of its LiPF6 externally for electrolyte production, resulting in a much weaker earnings performance compared to Tinci during the period.
2. Solid-State Battery Initiatives Propel Stock Surge, Multiple Executives Cash Out Millions
Benefiting from the ongoing recovery in LiPF6 prices and the approaching commercialization of solid-state batteries, Capchem, as a solid-state battery concept stock, has attracted investor interest. Since hitting a low on April 9, 2025, the company's stock price has accumulated gains of over 100%.
The year 2025 marked a critical juncture for solid-state batteries, transitioning from laboratory research towards commercial mass production. Companies across the supply chain, from upstream material producers to midstream equipment makers and downstream battery manufacturers, have announced plans and targets related to solid-state batteries.
For instance, leading electrolyte producer Tinci Materials stated that its sulfide solid-state electrolyte has entered the pilot-testing stage, with plans to establish a hundred-ton pilot production line by mid-2026.
In the equipment sector, companies like Win Laser have supplied full solid-state battery R&D lines to two major lithium battery customers. In the battery sector, CATL, the world's largest lithium battery manufacturer, indicated that mid-term evaluation sample results exceeded expectations, confirming plans for small-batch production of all-solid-state batteries by 2027.
Compared to traditional liquid lithium-ion batteries, solid-state batteries offer advantages such as enhanced safety, longer range, and extended service life. Consequently, many industry experts believe that, following continuous technological breakthroughs, solid-state batteries will eventually replace traditional liquid lithium-ion batteries.
Data from the China Business Industry Research Institute shows that China's solid-state battery market size was 1.7 billion yuan in 2024, projected to grow to 20 billion yuan by 2030, with a compound annual growth rate exceeding 50%. Given this promising market outlook, companies involved in solid-state batteries have garnered strong investor interest in capital markets.
Capchem is no exception. In its investor Q&A, Capchem stated that it is engaged in mainstream technology pathways including LLZTO, LATP, and LPS/L, and has achieved small-batch supply of related products.
Furthermore, Shenzhen Xinyuanbang Technology Co., Ltd., a company in which Capchem holds shares, has achieved hundred-ton level mass production and sales of solid electrolyte materials.
Driven by its positioning in the solid-state battery sector and the recovery in electrolyte prices, Capchem's stock price has more than doubled since its low on April 9, 2025.
Tempted by the significant stock price increase, several company executives disclosed plans to reduce their holdings. Directors and Executive Vice Presidents Zhou Aiping and Xie Weidong, along with Vice Presidents Jiang Xisong and Song Hui, collectively sold over 870,000 shares between July and October 2025, cashing out approximately 40 million yuan.
3. Over 400 Companies Queue for Hong Kong IPO, Yet Capchem Plans Listing to Fund Overseas Expansion
Amid the rising stock price, Capchem submitted its listing application to the Hong Kong Stock Exchange on January 27, 2026, aiming to raise funds through a Hong Kong listing.
According to the plan, the proceeds from the IPO will primarily be used to expand electrolyte and raw material production capacity both overseas and domestically. Capchem also intends to use part of the funds to supplement working capital.
Over the past year, a rebound in the Hong Kong market has led to a surge in mainland companies seeking listings there. Data from Wind shows that 119 companies completed IPOs in Hong Kong during 2025, raising a total of HKD 286.5 billion, a record high in recent years.
The Hong Kong Exchanges and Clearing website indicates that over 400 companies are currently awaiting IPO approval. UBS estimates that more than 150 companies might complete Hong Kong IPOs in 2026, yet this pace may not quickly resolve the backlog of firms awaiting hearings.
Therefore, it will be challenging for Capchem to secure a hearing quickly, obtain financing, and list successfully in Hong Kong in the short term.
Compared to the domestic market, product prices overseas are higher, leading to stronger profitability. Data shows that Capchem generated overseas revenue of 885 million yuan in the first half of 2025, slightly down from 924 million yuan in the first half of 2024. Despite this, the profitability of its overseas business far exceeds that of its domestic operations.
In the first half of 2025, Capchem's overseas business gross margin was as high as 45.4%, compared to just 19.69% for its domestic business. Consequently, with overseas revenue of only 885 million yuan, the company achieved a core operating profit of 402 million yuan from international operations. In contrast, domestic revenue reached 3.363 billion yuan during the same period, but generated a core operating profit of only 662 million yuan.
Currently, Capchem operates one production base in Europe and is constructing an operational delivery center in Southeast Asia. Additionally, the company plans to build two more production bases in Europe and Southeast Asia.
Beyond planning overseas production facilities, Capchem intends to expand production capacity for new lithium battery materials at multiple sites to enhance its integrated production capabilities.
According to Capchem's disclosed outward investment information, the total planned investment for future production base construction exceeds 2 billion yuan. Including the capacity expansion projects outlined in its prospectus, Capchem's cumulative outward investment amount is set to rise significantly.
As of September 30, 2025, Capchem held cash and cash equivalents of 1.54 billion yuan, along with 620 million yuan in tradable financial assets. Therefore, financing the construction of multiple production bases solely with existing cash reserves presents a challenge.
Particularly for overseas capacity expansion, Capchem faces competition, as leading electrolyte producers like Tinci Materials are also rapidly building overseas electrolyte production facilities.
In June 2025, Tinci Materials announced plans to invest approximately USD 280 million in building an integrated production base in Morocco for electrolytes and key raw materials. Upon completion, the facility is expected to have an annual production capacity of 150,000 tons of electrolyte products and related key raw materials.
Thus, swiftly completing overseas capacity expansion to capture market share and avoid potential price wars later is crucial for Capchem.
However, with the long queue for Hong Kong IPOs, securing financing quickly for overseas capacity build-out is difficult. Consequently, Capchem may need to explore alternative financing channels.
Compared to the asset-liability ratios exceeding 60% seen in other lithium battery material sectors, Capchem currently maintains a relatively lower ratio. As of September 30, 2025, the company's asset-liability ratio was 41.81%, indicating potential room for debt financing.
For Capchem, swiftly increasing the self-supply ratio of LiPF6 is critical for improving profitability amidst the ongoing electrolyte price recovery. Furthermore, with over 400 companies queuing for Hong Kong IPOs, obtaining financing quickly through a listing is challenging. Therefore, to accelerate the growth of overseas revenue, Capchem might need to seek funding through other channels for its expansion plans.
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