HSC Seeks Hong Kong IPO Amid Profit Volatility

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The maker of lithium-ion battery electrolyte additives is seeking a Hong Kong listing, but its profitability remains highly vulnerable to price cycles image credit: Bamboo Works In theory, being the ...

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In theory, being the world's top manufacturer for any established product should make profits come easy. But forJiangsu HSC New Energy Materials Co. Ltd., whichfiled last weekfor a Hong Kong IPO, that logic doesn't quite hold.Founded in the 1990s when electric vehicles  were mostly an unproven concept, HSC moved into the business of making lithium battery electrolyte additives that are a key component for EV batteries in the early 2000s. It was one of China's first companies to achieve mass production of vinylene carbonate  and later developed a differentiated process for fluoroethylene carbonate , which are both used in lithium batteries.Undeterred by such cyclicity, HSC still plans to further expand with the addition of 60,000 tons of VC capacity involving a roughly 950 million yuan investment. This move is essentially a bet on future","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"688353":"华盛锂电","BK0229":"化学制品","LU1815336091.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AUP\" (USD) INC","IPOS":"Renaissance International IPO ETF","BK4124":"机动车零配件与设备","SPCX":"SPAC and New Issue ETF","LU0757428866.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AE\" (USD) ACC","VC":"伟世通","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC"},"translate_title":"HSC在利润波动中寻求香港IPO","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"688353":1,"SPCX":1.5,"IPOS":1.5,"VC":1},"content_text":"The maker of lithium-ion battery electrolyte additives is seeking a Hong Kong listing, but its profitability remains highly vulnerable to price cycles\nimage credit: Bamboo Works\nIn theory, being the world's top manufacturer for any established product should make profits come easy. But for Jiangsu HSC New Energy Materials Co. Ltd. (688353.SH), which filed last week for a Hong Kong IPO, that logic doesn't quite hold.\nFounded in the 1990s when electric vehicles (EVs) were mostly an unproven concept, HSC moved into the business of making lithium battery electrolyte additives that are a key component for EV batteries in the early 2000s. It was one of China's first companies to achieve mass production of vinylene carbonate (VC) and later developed a differentiated process for fluoroethylene carbonate (FEC), which are both used in lithium batteries.\nAfter nearly two decades of building its expertise, the company has secured a leading position in this small but important upstream segment of the lithium battery supply chain. It became the world's largest lithium-ion battery electrolyte additives supplier by volume last year, commanding 15.2% of the market, according to third-party market data in its listing application.\nMarket conditions began improving in 2025 as inventory levels normalized and downstream demand kept growing, with VC and FEC prices recovering in the second half of last year. As that happened, the company's revenue surged and its gross profit margin returned to positive territory at 9.7%.\nAt the same time, the company made progress on cost control. By recycling triethylamine, it reduced its consumption of the chemical compound by about 85%. Similar recycling helped to cut wastage for its solvent recovery units by approximately 75%. These measures lowered its cost-to-revenue ratio from 122.9% in 2024 to 90.3% in 2025. Nevertheless, the return to profitability was mostly dependent on the rebound in VC and FEC prices.\nThe company's profit recovery has been overshadowed by intense pressure on its operating cash flow, which has been negative over the last three years. HSC's net cash outflow from operating activities widened to 257 million yuan in 2025 from 135 million yuan in 2023. Over the same period, its cash plunged from 1.99 billion yuan at the end of 2023 to 333 million yuan by the end of last year.\nIts core issue lies in payment collection from its customers. Its trade receivables and notes surged from 168 million yuan in 2023 to 593 million yuan in 2025, more than tripling over that time. Meantime, turnover days stretched from 127 days to 190 days over that period, as cash-strapped customers took significantly longer to pay their bills.\nUndeterred by such cyclicity, HSC still plans to further expand with the addition of 60,000 tons of VC capacity involving a roughly 950 million yuan investment. This move is essentially a bet on future demand and steady prices. But many of its rivals may be thinking similarly and adding more capacity as prices recover.\nTo subscribe to Bamboo Works free weekly newsletter, click here\nBenzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.\nTo add Benzinga News as your preferred source on Google, click here.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.42.0","shortVersion":"4.42.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2629218230","isCrawlerRequest":true}