A stock profit of less than 1.2 million yuan from five years ago has dragged a lithium industry leader with a market cap of hundreds of billions into a multi-faceted vortex involving regulators, judicial authorities, and capital operations.
With the chairman leading insider trading resulting in penalties, criminal risks emerging, compounded by the blocked IPO of its subsidiary Ganfeng Lithium Battery and the triggering of a repurchase clause, Ganfeng Lithium Group Co.,Ltd. (002460.SZ, 01772.HK) continues to pay a heavy price for a historical incident.
The timeline traces back to 2020. To resolve delisting risks, *ST Jiangte (now Jiangte Motor, 002176.SZ) planned to introduce Ganfeng Lithium as its controlling shareholder through a private share issuance.
This matter constituted inside information, formed no later than June 9, 2020, and was publicly disclosed on August 13, 2020, with a sensitive period spanning over two months.
Regulators determined that during the inside information sensitive period, Ganfeng Lithium's Chairman and then President Li Liangbin and then Board Secretary Ouyang Ming were insiders privy to the information, having knowledge of it no later than June 18, 2020.
The penalty decision issued by the Jiangxi Securities Regulatory Bureau shows that, under Li Liangbin's decision and arrangement, with Ouyang Ming specifically responsible, employees from Ganfeng Lithium's securities department operated the company's securities account for trading.
This account transferred in 30 million yuan on June 22, 2020, and cumulatively purchased 15.6777 million shares of *ST Jiangte between June 23 and July 2, with a total transaction value of 26.4838 million yuan.
Subsequently, it sold all the shares between July 8 and 9, 2020, with a transaction value of 27.6329 million yuan, ultimately realizing a profit of 1.1053 million yuan.
Regulatory authorities confiscated Ganfeng Lithium's illegal gains and imposed a fine of 3.3159 million yuan, while Li Liangbin and Ouyang Ming were fined 600,000 yuan and 200,000 yuan respectively and given warnings.
It is noteworthy that Ouyang Ming subsequently filed an administrative lawsuit against the penalty; the case was heard at the Nanchang Railway Transport Court in November 2024, but no trial outcome has been seen yet.
Public information shows that Ouyang Ming, aged 50, joined Ganfeng Lithium in January 2002 and has served as Vice President and Board Secretary since June 2014.
According to Ganfeng Lithium's 2022 annual report, due to an adjustment in work focus, she resigned from the position of Board Secretary on August 30, 2022, but still serves as a Vice President of the company.
Currently, Ouyang Ming also serves as Vice Chairman of Ganfeng Lithium's recycling segment and has been a director of Ganfeng Lithium Battery since November 2021.
Despite the penalties imposed on the individuals involved, the matter did not stop at the administrative level.
Last night, Ganfeng Lithium announced that it had received a notice of transfer for prosecution from the Yichun Public Security Bureau on the same day.
According to this notice, due to suspected unit crime of insider trading, the case has been transferred to the procuratorate for review and prosecution.
The company emphasized that this is a "specific historical event disclosed previously" and is expected not to affect normal operations.
However, the shift from administrative punishment to criminal review signifies a change in the nature of the case, bringing compliance risks back into public focus.
Setting aside the compliance incident, Ganfeng Lithium's operational trajectory is also at a critical inflection point.
The company was established in March 2000, headquartered in Xinyu City, Jiangxi Province, and is currently the world's largest producer of metallic lithium and the largest domestic supplier of lithium compounds.
Its business spans the entire industrial chain: upstream lithium resource development, midstream lithium salt deep processing and metallic lithium smelting, and downstream lithium battery manufacturing and comprehensive recycling of retired lithium batteries.
Ganfeng Lithium listed on the A-share market in August 2010 and went public in Hong Kong in October 2018, becoming the first "A+H" dual-listed company in the lithium industry.
Through investments and acquisitions, the company has established a global presence, owning high-quality lithium mining projects in countries like Argentina, Australia, and Mali.
The primary lithium resource currently used by Ganfeng Lithium is the Mount Marion spodumene project in Australia, with total lithium resources equivalent to approximately 2.19 million tonnes LCE (lithium carbonate equivalent).
From 2010 to 2022, the company's revenue saw a continuous upward trend, but its profits were highly dependent on the cycle.
In 2022, amid soaring lithium prices, Ganfeng Lithium achieved revenue of 41.823 billion yuan and net profit attributable to shareholders of 20.504 billion yuan, with year-on-year increases of 274.68% and 292.16% respectively, marking the peak of its performance.
In the following two years, profits within the lithium battery industry chain shifted downstream, leading to extremely challenging times for lithium battery material companies.
In 2024, Ganfeng Lithium's revenue fell to 18.906 billion yuan, recording its first loss since listing, with a net profit of -2.074 billion yuan.
The lithium product series contributes over sixty percent of the company's revenue, but the price decline directly eroded profits.
Since 2010, the lithium battery industry has experienced two significant price fluctuation cycles.
The first fluctuation occurred between 2015 and 2019, with lithium carbonate prices rising from a low of 42,000 yuan/tonne to a high of 180,000 yuan/tonne, before falling back to 48,000 yuan/tonne by the end of 2019.
The industry is currently in the midst of the second fluctuation cycle. Lithium carbonate prices approached 600,000 yuan/tonne in November 2022, then declined rapidly, falling below 60,000 yuan/tonne by June this year, and have since recovered to over 120,000 yuan/tonne.
The sharp reversal in lithium carbonate prices has simultaneously pressured the balance sheets and cash flows of upstream enterprises.
In the first three quarters of this year, Ganfeng Lithium reported revenue of 14.625 billion yuan and a net profit of 25.52 million yuan. While this superficially represents year-on-year growth, the structure is not healthy.
The significant recovery in net profit for the third quarter was mainly attributable to changes in the fair value of financial assets and increased gains from the disposal of part of its energy storage stations and its associate LAC, rather than a rebound in lithium prices.
Net cash flow from operating activities for the quarter was -429 million yuan, a decrease of 110.45% year-on-year.
As of the end of September, the company's total liabilities stood at 63.463 billion yuan, with an asset-liability ratio of approximately 57.59%. Short-term borrowings were 10.577 billion yuan, while the balance of cash and cash equivalents was 8.017 billion yuan.
The real test for management lies in the setback of capitalizing the downstream lithium battery business.
Ganfeng Lithium Battery was established in June 2011 and only began to be incorporated into the Ganfeng Lithium Group's strategy around 2017.
Between November 2020 and November 2022, Ganfeng Lithium rapidly scaled it up through three rounds of capital increase, introducing an employee持股 platform and industrial capital.
The first round of capital increase primarily involved "insiders." After its completion, Ganfeng Lithium held a 54.62% stake, with the price for the capital increase and expansion set at 1 yuan per registered capital.
In July 2021, Ganfeng Lithium announced plans for a second capital increase for Ganfeng Lithium Battery, injecting 2 billion yuan of its own funds, while simultaneously introducing an employee持股 platform and 20 industrial investors represented by Xiaomi's Xiaomi Industrial Investment and Jimu Venture Capital (collectively contributing approximately 971 million yuan).
The price for this round's capital increase and expansion was 2.5 yuan/share, with participants mostly being downstream automotive companies in the industrial chain, such as Xiaomi, Dongfeng Motor, and Changan Automobile.
After the capital increase was completed in October that year, Ganfeng Lithium Battery's registered capital increased to approximately 2.136 billion yuan, and Ganfeng Lithium's shareholding rose back to 60.87%.
Notably, this investment included a valuation adjustment mechanism (VAM) clause: if Ganfeng Lithium Battery failed to achieve a qualified IPO by December 31, 2025, investor shareholders had the right to request the company's actual controller to repurchase their shares.
In November 2022, the third round of capital increase and expansion commenced. Ganfeng Lithium, along with 11 external investors and the employee持股 platform, collectively injected nearly 2.7 billion yuan into Ganfeng Lithium Battery, with a price of 3 yuan/share.
This capital increase also contained the same VAM clause. After its completion, Ganfeng Lithium's shareholding reached 65.48%, and Ganfeng Lithium Battery's registered capital increased to 3.003 billion yuan.
Concurrently, Ganfeng Lithium initiated feasibility studies for the spin-off listing of Ganfeng Lithium Battery on the Shenzhen Stock Exchange.
However, in December of the same year, the prior notice of administrative punishment for insider trading was issued, planting the seeds of risk.
According to CSRC regulations, if a listed company, its controlling shareholder, or actual controller has been subject to administrative punishment by the CSRC within the last 36 months, it cannot proceed with a spin-off listing.
When the administrative penalty was formally imposed in July 2024, the time window was effectively sealed shut. Consequently, it became impossible for Ganfeng Lithium Battery to complete its IPO before the end of 2025, triggering the VAM clause.
In March this year, Ganfeng Lithium Battery initiated a targeted capital reduction and repurchase, planning to repurchase no more than 499 million shares for up to 1.6 billion yuan.
This repurchase involved 28 shareholders, with 23 exiting completely, including Jimu Venture Capital, Xiaomi Industrial Investment, and "Power Bank Leader" Anker Innovations (300866.SZ).
The collective departure of capital seems to directly point to the shattered IPO expectations for Ganfeng Lithium Battery.
To meet the funding needs for Ganfeng Lithium Battery's operational development, Ganfeng Lithium announced in April that it would provide financial assistance of up to 700 million yuan.
Furthermore, Ganfeng Lithium promoted a new round of capital increase in September, planning to introduce up to 2.5 billion yuan in funds, with an increase price of 3 yuan per 1 yuan of registered capital.
As of September 25, 2025, Ganfeng Lithium held an 81.65% stake in Ganfeng Lithium Battery, whose registered capital decreased to approximately 2.509 billion yuan.
In terms of operational data, Ganfeng Lithium Battery is still in a loss-making state.
It achieved revenue of 6.073 billion yuan in 2024, with a loss of 128 million yuan; in the first half of this year, it achieved revenue of 2.600 billion yuan, with a loss of 62.7176 million yuan, and an asset-liability ratio of 68.02% at the period-end.
Without profitability or a listing, its funding needs will ultimately fall back onto the parent company's balance sheet.
From insider trading led by the chairman, to the受阻 spin-off listing of the subsidiary, and the activation of the repurchase clause, Ganfeng Lithium is paying a long-term price for a single historical misstep.
While industry fundamentals can reverse, the costs associated with compliance and governance cannot be hedged, which is perhaps the most immediate challenge facing this lithium mining giant valued at hundreds of billions.
