Amid the accelerating penetration of new energy vehicles, the rapid expansion of the energy storage industry, and the fast iteration of 5G/6G communication technologies, electrolytic copper foil, as a core foundational material for lithium batteries and printed circuit boards, is experiencing rapidly growing market demand. The technical barriers and supply stability of high-performance electrolytic copper foil have become a central focus for the entire industry chain. Against this industry tailwind, Tongbo Technology, a leading Chinese electrolytic copper foil solutions provider, formally submitted its listing application to the Main Board of the Hong Kong Stock Exchange on January 28, aiming to consolidate its market position through the capital raised from the IPO. This company, with nearly a decade of industry experience, possesses core advantages in technology and customer resources but also faces multiple challenges from industry cycles and its financial structure.
According to the prospectus, Tongbo Technology, established in 2016, is an electrolytic copper foil solutions provider focusing on the design, R&D, production, and sales of high-performance electrolytic copper foil. Data from Frost & Sullivan shows that, based on sales volume in 2024, the company was the ninth-largest electrolytic copper foil producer in China, holding a market share of approximately 4%. By sales volume in 2024, it was also the second-largest producer of high-performance lithium battery copper foil in China, with a market share of 13%. The company's product portfolio comprises two core categories: standard and high-performance lithium battery copper foil, which serves as an indispensable anode current collector in lithium-ion batteries; and electronic circuit copper foil, used in the production of printed circuit boards (PCBs) and copper-clad laminates (CCLs).
The lithium battery copper foil produced by the company is a key component in various lithium batteries used in new energy vehicles, energy storage systems, and consumer electronics. It offers customizable copper foil products with thicknesses ranging from 3μm to 10μm, covering various tensile strength grades from standard to very high strength. Simultaneously, high-end electronic circuit copper foil is a core material for manufacturing PCBs and CCLs, widely used in markets such as 5G/6G communications, AI servers, high-performance computing, commercial aerospace, automotive electronics, and consumer electronics. Furthermore, the company supplies specialized anode current collector samples for solid-state and semi-solid-state batteries to globally leading battery manufacturers, and provides samples of reverse-treated foil (RTF) and hyper very low profile (HVLP) foil to several leading domestic PCB and CCL manufacturers.
Technological innovation is the core competitiveness of Tongbo Technology, with the company achieving repeated breakthroughs in key indicators like ultra-thinness and high strength. It achieved mass production of 5μm ultra-thin copper foil in 2019, launched 4.5μm ultra-high strength copper foil with a tensile strength ≥600MPa in 2023, further commercialized 6μm extremely high strength product with tensile strength ≥700MPa in 2024, and successfully developed multi-metal current collector samples for solid-state batteries. As of the latest practicable date (January 21, 2026), the company had accumulated 96 authorized patents and participated in drafting the national industry standard "Electrolytic Copper Foil for Lithium-ion Batteries."
In terms of production and supply chain, the company has established a scaled layout. Its existing integrated production base in Fuzhou, Jiangxi, includes the Tongbo Plant (annual capacity of 20,000 tonnes) and the Shengeng Plant (annual capacity of 50,000 tonnes), with a total combined annual designed capacity of 70,000 tonnes; the overall capacity utilization rate reached 91.3% in the first nine months of 2025. To meet growing market demand, in October 2025, the company commenced construction of another smart automated manufacturing plant in Sichuan Province, with an initial designed annual capacity of 20,000 tonnes, expected to begin mass production in the fourth quarter of 2026. Additionally, a new production line with a designed annual capacity of 20,000 tonnes at the Shengeng Plant commenced operations in December 2025. For supply chain management, the company adopts a centralized procurement model and has established long-term cooperation with several large domestic non-ferrous metal suppliers, ensuring stability of raw material supply and cost advantages. From 2023 to the first nine months of 2025, the procurement proportion from its top five suppliers decreased from 94.9% to 64%, indicating continuous optimization of supply concentration.
Regarding customer resources, the company has established long-term cooperative relationships with six of the world's top ten lithium battery manufacturers, including industry giants like CATL and EVE Energy. In the first nine months of 2025, revenue from the top five customers accounted for 82% of total revenue, with the largest customer contributing 58%. While Tongbo Technology's performance has shown steady growth in recent years, it simultaneously faces pressures from gross margin fluctuations and cash flow management. On the revenue side, the company achieved revenue of RMB 3.163 billion in 2023, which increased to RMB 3.212 billion in 2024, and further grew by 24.4% year-on-year to RMB 2.849 billion in the first nine months of 2025.
In terms of profitability, the company's gross margin has fluctuated due to industry cycles and product mix. The gross margin was 6.7% in 2023, decreased to 3.1% in 2024 due to a temporary oversupply in the lithium battery copper foil market leading to lower processing fees, and recovered to 4.8% in the first nine months of 2025 as market demand picked up and sales of higher value-added products increased. Notably, the electronic circuit copper foil business remains loss-making, but the gross loss rate is gradually narrowing; with the demand explosion in downstream markets like AI and 5G, it is expected to become a new growth driver for performance. The company employs the industry-standard "copper price plus processing fee" pricing model, which effectively insulates core profits from raw material price fluctuations, providing a relatively stable guarantee for profitability.
Financially, the company faces certain liquidity pressures. Net cash outflow from operating activities was RMB 715 million in 2024 and RMB 349 million in the first nine months of 2025, primarily affected by the industry's characteristic business model of "cash purchases of copper + acceptance of notes for receivables." This necessitates the company to supplement cash flow through financing activities. As of September 30, 2025, the company's gearing ratio reached 172.7%, a significant increase from 115.7% in 2023. Furthermore, the turnover period for trade receivables and notes receivable is relatively long, at 170.5 days in the first nine months of 2025, with trade receivables amounting to RMB 1.501 billion and notes receivable at RMB 344 million during the same period. Tongbo Technology stated in its prospectus that it cannot guarantee the timely or full collection of all or any trade receivables and notes receivable and may face credit risks. The company also applies predetermined expected credit loss rates to provide for impairment on trade receivables and notes receivable. Should the conditions related to these receivables deteriorate, the company may need to recognize additional impairments accordingly.
As the electrolytic copper foil industry enters a period of high growth, Tongbo Technology is poised to enhance its competitiveness and improve profitability through the listing. From an industry trend perspective, a Frost & Sullivan report indicates that global electrolytic copper foil sales volume grew from 590.3 thousand tonnes in 2020 to 1.4934 million tonnes in 2024, representing a compound annual growth rate (CAGR) of 26.1%. During the forecast period, global sales volume is expected to further increase to 4.0669 million tonnes by 2029, with a CAGR of 22.2% from 2024 to 2029. China's electrolytic copper foil sales volume grew from 362.4 thousand tonnes in 2020 to 1.0481 million tonnes in 2024, a CAGR of 30.4%. Looking ahead, China's sales volume is projected to reach 2.7147 million tonnes by 2029, with a CAGR of 21% from 2024 to 2029.
At the policy level, national support for the new energy industry and the advancement of the "Dual Carbon" goals provide a favorable development environment for the electrolytic copper foil industry. The company has obtained high-tech enterprise qualification, enjoying a preferential corporate income tax rate of 15%, and has been recognized as a National Specialized, Refined, Distinctive, and New "Little Giant" Enterprise, giving it advantages in R&D expense super-deductions and industrial policy support. Furthermore, industry trends towards "ultra-thinness, low roughness, and green production" align closely with the company's technological focus, laying the foundation for capturing market opportunities. The company has received the Jiangxi Province Green Factory certification and, through emission reduction measures like wastewater recycling and green electricity procurement, has achieved large-scale application of a green arsenic-free roughening process, aligning with sustainable development trends.
From a competitive landscape perspective, China's electrolytic copper foil industry is relatively fragmented, with the top ten manufacturers holding a combined market share of only 48.1%, indicating significant room for industry consolidation. Leveraging its comprehensive advantages in technology R&D, customer resources, and production capacity scale, Tongbo Technology is well-positioned to further increase its market share during this consolidation. The proceeds from the IPO are intended for capacity expansion, R&D investment, and working capital supplementation. The construction of the Sichuan smart factory will further strengthen its scale advantage, while the upgrade of its R&D center will help maintain its leadership in cutting-edge areas like current collectors for solid-state batteries and high-frequency, high-speed copper foil. As a benchmark enterprise in the high-performance electrolytic copper foil sector, Tongbo Technology, with its technological accumulation, stable customer relationships, and continuously expanding production capacity, successfully rides the industry tailwind. This Hong Kong listing is expected to provide capital support, further enhancing its brand influence and industrial integration capabilities. However, the company still needs to address potential risks such as gross margin volatility, a high gearing ratio, and high customer and supplier concentration. For investors, the company's technological barriers, customer quality, and industry growth红利 are key points of focus, while its ability to navigate industry cycles and financial risks will ultimately determine its long-term investment value.
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