As competition intensifies across the lithium battery supply chain, listed companies are feeling the squeeze on earnings, prompting several industry leaders to explore new frontiers for growth. Shenzhen Senior Technology Material Co.,Ltd. (ASX: SENIOR MATERIAL), a prominent player in lithium battery separators, has recently taken a decisive step in this direction.
In a recent announcement, the company revealed plans to acquire a combined 59.98% stake in Bangci Electronic Technology (Yancheng) Co., Ltd. (hereafter "Bangci Electronics") for a total of 242 million yuan from seven sellers. Upon completion of this transaction, the company's total ownership in Bangci Electronics will rise to 73.48%, and the target will be consolidated into its financial statements.
Bangci Electronics is one of the few domestic enterprises with the capability for large-scale production of multilayer piezoelectric ceramic stacks, with applications spanning semiconductor MFCs, new energy, 3C electronics, and aerospace sectors. This acquisition comes as the company's core business faces headwinds, with net profits declining for three consecutive years from 2023 to 2025, and 2025 marking its first ever annual loss in non-recurring net profit since listing. In the first quarter of this year, net profit continued to fall by 37% year-on-year. Against this backdrop, the company stands at a critical crossroads for transformation.
Core business under pressure, profits down for three straight years
The company's origins are themselves a story of import substitution. Founder Chen Xiufeng, with a background in banking and trade, spotted a significant opportunity in the lithium battery separator market in the early 2000s. After years of research and development, the company achieved breakthroughs in both wet and dry process separator technologies, producing its first roll of dry-process separator in 2008 and breaking the monopoly of overseas firms. As China's new energy vehicle adoption accelerated, the company grew rapidly, holding a 7% global market share in mainstream lithium-ion battery separators by 2014, serving clients like LG Chem, BYD, and CALB.
Listed on the Shenzhen Stock Exchange's ChiNext board in 2016, the company saw its net profits climb steadily from the second half of 2020, reaching a historical peak in 2022 with total revenue of 2.88 billion yuan and a net profit of 719 million yuan. However, as market competition heated up and a fierce price war engulfed the lithium battery separator industry, profit margins narrowed sharply, and net profits declined for three consecutive years. From 2023 to 2025, revenue grew from 3.01 billion yuan to 4.13 billion yuan, but net profits fell from 576 million yuan to 3636.78万元. Gross margin dropped from around 45% at its peak to 23.03% in 2025, and net margin fell from 19.70% in 2023 to just 1.79%. Excluding non-recurring items, the company posted a loss of 54.29 million yuan in 2025, the first such loss since it began publishing financial data in 2012.
As profits continued to slide, the company's total market value also fell from a peak of over 40 billion yuan, briefly dropping below 10 billion yuan in September 2024. It has since recovered, with a market cap of 21.5 billion yuan as of August 19, 2026. In the first quarter of this year, the company continued its trend of "increasing revenue without increasing profit," with revenue up 21.53% year-on-year to 1.08 billion yuan, but net profit down 37.33% to 29.27 million yuan. There are some signs of improvement, as wet-process separator prices have recovered somewhat from the end of last year due to global energy storage demand, potentially offering marginal relief to the core business.
During this three-year profit slump, the company has not remained idle, actively seeking new profit drivers. On one front, it is accelerating its expansion into overseas markets, which offer less intense competition and higher gross margins. In 2025, overseas revenue reached 568 million yuan, accounting for 13.78% of total revenue, with a gross margin of 31.60%—more than 10 percentage points higher than its domestic business. The company is also building a plant in Malaysia, with the first phase slated for gradual production this year, while progress continues on bases in Sweden and the US.
On another front, the company is pushing into the solid-state battery arena. Its "Gu Rui" series rigid skeleton membrane is designed to be lightweight, highly porous, and with tunable pore sizes, compatible with semi-solid, quasi-solid, and all-solid-state battery routes. This product aims to improve energy density in all-solid-state batteries and address roll-to-roll assembly challenges. Additionally, the company has partnered with Ruigu New Materials to develop high-performance solid electrolyte membranes, and its stake in Xin Yuan Bang has achieved hundred-ton-level shipments of oxide electrolytes. However, both overseas markets and solid-state batteries remain within the broader battery separator field, leaving the company's single-business risk unaddressed. This urgency has made cultivating a second growth curve a priority.
A 242-million-yuan semiconductor bet for a new growth engine
The increased stake in Bangci Electronics represents a key move in the company's strategy to build a semiconductor materials business as its second growth curve, a direction it first outlined in its 2024 annual report. In January 2025, the company signed a strategic cooperation framework agreement with RS Technologies, a global leader in reclaimed wafers, to collaborate on semiconductor materials R&D and technology commercialization. Subsequently, it took a stake in Ferrotec Holdings, a major player in semiconductor equipment cleaning and precision quartz components, and increased its holding to over 5%.
The company has since expanded its commitment to new materials and semiconductor materials. In February this year, it acquired a 13.50% stake in Bangci Electronics for 91.07 million yuan. In early August, it launched a 1 billion yuan polymer tantalum capacitor project in Nantong, a product with broad applications in AI servers, automotive electronics, and industrial sectors. Now, with this 242-million-yuan investment, the company will hold 73.48% of Bangci Electronics, bringing it fully into its consolidated financial statements. This move signals that the company is treating semiconductor materials as a genuine new revenue stream.
Bangci Electronics specializes in multilayer piezoelectric ceramic stacks and single-layer piezoelectric ceramic sheets. The multilayer stacks are used in piezoelectric microfluidic control and micro-displacement platforms, with applications ranging from MFC mass flow controllers and lithium battery coating heads to precision dispensing and medical micro-injection. They are also critical for high-end semiconductor equipment and satellite laser communication systems. Single-layer sheets are widely used in ultrasonic transducers for welding and cleaning. According to CICC research, the global piezoelectric ceramics market was approximately 39 billion yuan in 2023, offering substantial headroom. Currently dominated by Japanese and German players like Kyocera, Murata, and PI, domestic players hold a small share, making Bangci Electronics a notable domestic player with mass production capabilities.
Financially, Bangci Electronics' revenue scale is modest but growing, from 50.39 million yuan in 2023 to 79.27 million yuan in 2025, with gross margins rising to 57.59% in 2025. Net profits increased from 10.92 million yuan in 2023 to 26.22 million yuan in 2025, with a net margin of 33.08%. In the first quarter of this year, revenue reached 47.49 million yuan, and net profit was 16.56 million yuan, lifting the net margin to 34.87%. The company notes that Bangci Electronics is showing rapid growth in 2026, with a healthy order backlog, indicating strong certainty and sustainability. For the struggling separator maker, consolidating Bangci Electronics' results will directly bolster its bottom line. The two companies also share a highly overlapping customer base in the lithium battery supply chain, offering clear synergies.
However, investors should note that the valuation for this acquisition is 629 million yuan, representing a 284.41% premium over Bangci Electronics' book value of 164 million yuan as of March 31, 2026. Additionally, the deal does not include explicit performance commitments. If Bangci Electronics' results fall short of expectations, the company could face goodwill impairment risks. In summary, this 242-million-yuan acquisition is a strategic move to counter the persistent decline in its lithium battery separator business, but whether the company can successfully integrate Bangci Electronics and achieve further breakthroughs in piezoelectric ceramics over the long term remains to be seen.
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