Shenzhen Senior Technology Material Co., Ltd. (300568.SZ), a globally leading lithium-ion battery separator manufacturer, is making another attempt for a dual primary listing in Hong Kong. According to a filing disclosed by the Hong Kong Stock Exchange on January 30, the company has submitted a listing application for the main board, with China Securities (International) Finance Holding Company Limited acting as the sole sponsor. The company had previously submitted an application on July 7, 2025. The prospectus indicates that the proceeds from the offering will be primarily allocated to four key areas: research and development of solid-state battery-related products, other functional membranes, and next-generation lithium-ion battery separator products; enhancing global production capacity layout by advancing the construction of overseas production bases in locations such as Malaysia and the United States; investing in companies focused on new battery separator materials and the semiconductor sector; and repaying loans for overseas bases and supplementing working capital.
Global's Second-Largest Lithium-Ion Battery Separator Manufacturer According to the prospectus, Senior Technology, established in 2003, is a manufacturer of lithium-ion battery separators with over 20 years of industry experience in R&D, production, and sales. It was the first Chinese company to achieve bulk exports of lithium-ion battery separators and is one of the few enterprises in China proficient in all three primary production technologies: dry-process, wet-process, and coated separators. Dry-process separators are created by uniaxially or biaxially stretching polyolefin materials to form a microporous structure; this technology is relatively simple and lower cost, making it widely used in mid-to-low-end markets. Wet-process separators utilize a thermally induced phase separation principle, involving mixing polyolefin resin with a high-boiling-point organic solvent as a diluent, followed by extrusion, cooling, and biaxial stretching processes; they feature a more uniform microporous structure and smaller pore size, effectively enhancing battery energy density and cycle life, and are predominantly used in high-end lithium batteries. Coated separators involve applying coating materials such as ceramic alumina or PVDF binder onto one or both sides of a base membrane (produced via dry or wet process) to further improve thermal stability, oxidation resistance, adhesion, and safety. The company excels in numerous key performance indicators for battery separators, including thickness, porosity, thermal shrinkage, air permeability, and puncture strength. It serves world-leading lithium-ion battery manufacturers, including LG Energy Solution, Samsung SDI, Envision AESC, Murata, SK On, SAFT, Contemporary Amperex Technology Co. Limited (CATL), BYD, Gotion High-tech, CALB, Eve Energy, and Sunwoda. Currently, the company has established six production bases in China, with overseas bases in Europe, Southeast Asia, and the United States under construction. In terms of innovation, it has set up R&D centers in China, Japan, and Sweden, with plans to establish additional centers in Southeast Asia and the United States. Its expanding network supports a broad customer base, encompassing over 100 leading lithium-ion battery manufacturers globally. According to Frost & Sullivan data, the company's lithium-ion battery separator shipment volume ranked second globally for five consecutive years, with its global market share increasing from 11% in 2020 to 14.4% in 2024. In 2024, the group held approximately 17.1% market share, ranking second in the Chinese battery separator market. By shipment volume, the company held the top global market share in the dry-process separator market and ranked second globally in the wet-process separator market in 2024.
Stable Revenue Growth Versus Product Price Pressure Limiting Profitability Senior Technology's operational performance shows distinct characteristics, with continuous scale expansion accompanied by profit pressure stemming from intensifying industry competition. Regarding revenue, from 2022 to 2024, the company's operating revenue was RMB 2.867 billion, RMB 2.982 billion, and RMB 3.506 billion, respectively. For the first nine months of 2025, revenue reached RMB 2.932 billion, a year-on-year increase of 13.7%, primarily supported by the ramp-up of overseas production capacity and deliveries to core customers. However, fluctuations in profitability directly reflect the impact of heightened industry competition. Net profit for the years 2022 to 2024 was RMB 748 million, RMB 594 million, and RMB 371 million, respectively, showing a year-on-year declining trend. For the first nine months of 2025, profit was RMB 141 million, a significant decrease of 59.9% year-on-year. The weakening profitability is also evident in gross margin and net profit margin figures. The gross margin for its separator products was 44.8%, 43.3%, 28.1%, and 21.3% for 2022-2024 and the first nine months of 2025, respectively. The net profit margin declined continuously from 26.1% in 2022 to 4.8% in the first nine months of 2025. The profit decline is partly attributed to price competition caused by structural overcapacity in the industry, directly compressing the company's profit margin. For instance, in 2024, the average selling prices for dry-process, wet-process, and coated separators plummeted to RMB 0.35, RMB 0.81, and RMB 1.25 per square meter, representing year-on-year decreases of 38.6%, 23.6%, and 39.2%, respectively. Although the company has worked to reduce costs through production process optimization and economies of scale, the decline in selling prices has far exceeded the reduction in costs, severely squeezing profit margins. In the first nine months of 2025, the average selling price for its three main products dropped to RMB 0.86 per square meter, down 6.5% year-on-year. Additionally, increased depreciation, amortization, and financial costs associated with the construction of overseas bases and capacity expansion have also pressured profits. Financial costs reached RMB 153 million in the first nine months of 2025, a 47.3% year-on-year increase. The profit decline has had a cascading effect on the company's financial position. Net cash flow from operating activities was RMB 368 million in 2024, down 67.5% year-on-year, indicating a weakened ability to generate cash from core operations. Net cash flow from investing activities remained negative throughout the reporting period, reflecting substantial investments in capacity expansion and technological R&D. Cash flow from financing activities shows the company has been alleviating funding pressure through means like debt financing, but this has also increased the debt burden. The company's asset-liability ratio climbed from 37.4% in 2022 to 56.9% in 2024, and further increased to 60.8% in the first nine months of 2025.
Growth Opportunities Remain in the Industry; Diversified Strategy Aims to Capture Momentum Despite short-term profit pressures, Senior Technology's long-term development prospects are closely tied to industry growth trends, with multiple positive factors potentially offering substantial growth opportunities. According to a Frost & Sullivan report, driven by additional government regulations and technological advancements, the global battery separator market shipment volume is projected to increase from 27.7 billion square meters in 2024 to 84.1 billion square meters in 2029, representing a compound annual growth rate of 24.8%. Furthermore, influenced by factors such as increasing local production capacity in Europe and the United States, and overseas expansion by Chinese separator manufacturers aligning with the globalization of the lithium-ion battery supply chain, the share of battery separator shipments from regions outside China is expected to rise from 16% in 2024 to 34.1% in 2029, with a CAGR of 45.3%. To capitalize on the growing demand for lithium battery separators and structural development opportunities, Senior Technology plans to use part of the IPO proceeds for R&D related to solid-state battery products, other functional membranes, and next-generation separator products. Regarding solid-state battery products, the company is committed to the systematic development of solid-state battery materials, solid electrolyte membranes, and semi-solid electrolyte membranes. In the semiconductor materials sector, the company has developed high-purity ceramic materials such as alumina, silicon dioxide, and boehmite, which can be applied in thermoelectric semiconductors, ceramic substrates, and quartz components. The company also intends to invest in enterprises focused on new battery separator materials and the semiconductor field to enhance core technologies, broaden its product portfolio, and build a second growth curve. Specifically, potential investment targets primarily include manufacturers in the new materials and semiconductor industries, focusing on those with leading technologies in their respective fields to gain a competitive edge in the future battery separator and semiconductor materials markets. In the short term, Senior Technology must address pressures from industry price competition, profit decline, and rising leverage, with the pace of profit recovery being a key focus. Long-term, benefiting from the growth of the global new energy vehicle and energy storage industries, coupled with the potential second growth curve from diversification into areas like solid-state batteries and semiconductor materials, the industry's expansion provides significant opportunities. For investors, the key investment value of Senior Technology lies in the potential release of profit elasticity following an improvement in industry supply-demand dynamics, as well as the tangible progress in R&D commercialization, overseas capacity ramp-up, and order fulfillment. As a rare player with a leading global position, technological barriers, and an international footprint, its market performance following the potential Hong Kong listing warrants continued attention.
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