On December 24, LOPAL TECH (SH603906, stock price: ¥20.33, market cap: ¥13.93 billion), a leading lithium iron phosphate (LFP) producer, announced plans to increase the Phase III capacity of its funded project, "Large-Scale Production of Cathode Materials for New Energy Vehicle Power and Energy Storage Batteries," from 62,500 tons/year to 100,000 tons/year.
The original project aimed to establish a production line with an annual capacity of 150,000 tons of LFP cathode materials, divided into three phases. Currently, Phase I (25,000 tons/year) and Phase II (62,500 tons/year) have been completed. With the Phase III expansion, total capacity will reach 187,500 tons/year.
LOPAL TECH’s board of directors approved the proposal to modify the project’s Phase III capacity and authorized management to handle related adjustments. The board stated that the decision aligns with long-term development goals, improves capital efficiency, and enhances operational performance without harming shareholder interests.
In May 2022, LOPAL TECH raised ¥2.18 billion in a private placement to fund multiple projects, including the LFP cathode material expansion, a 600,000-ton/year automotive urea project, a 40,000-ton/year battery-grade energy storage material project, and working capital. As of November 30, most projects exceeded 100% investment progress, except the LFP cathode material project, which reached 56.85% (¥733 million invested out of ¥1.29 billion planned).
The funded project is being implemented in three phases in Suining, Sichuan. Phases I and II are operational, while Phase III, initially planned for 62,500 tons/year, was adjusted to 100,000 tons/year. The completion deadline was also extended from May 2025 to May 2026.
The revised Phase III requires approximately ¥910 million in investment, including ¥789 million for equipment and ¥66.74 million for working capital. Financial projections estimate a post-tax internal return rate of 12.59% and a payback period of 7.64 years. The project has completed local regulatory filing but awaits environmental and energy assessments.
The rapid growth of new energy vehicles and energy storage has driven demand for LFP cathode materials. LOPAL TECH has partnered with major battery manufacturers like CATL, LG Energy Solution, Sunwoda, and EVE Energy. Industry leaders are expanding production to meet rising demand.
Competitors such as Hunan Yuneng and Ronbay Technology are also scaling up LFP-related capacities, while Wanhua Chemical recently signed an agreement for a 650,000-ton/year LFP project.
However, LOPAL TECH warned of risks, including intensified competition and fluctuating lithium carbonate prices, which could impact market share and profitability. The company emphasized that supply constraints or price volatility in key raw materials like lithium carbonate may affect operations.
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