Having survived the low point of the price war, TINCI is applying for a Hong Kong listing amid the lithium battery boom

Lithium-ion battery electrolyte material manufacturer TINCI plans to go public in Hong Kong, with expected fundraising exceeding 1 billion USD. Key Points: TINCI has submitted its Hong Kong listing application and stated that after a significant decline in revenue and profit in 2024, its business rebounded last year. This leading company in the lithium-ion battery electrolyte field is accelerating the construction of new production bases outside China and expanding into new business areas such as sodium-ion battery materials. Yang Ge Guangzhou TINCI High-tech Materials Co., Ltd. has a notable characteristic in the age structure of its senior management team. The average age of the top three core executives of this lithium-ion battery material manufacturer is close to 60 years, which is uncommon among emerging technology companies in China. This deep experience may be a key reason why TINCI can maintain its leading position in the lithium-ion battery electrolyte field, with its products widely used in portable devices such as smartphones and numerous new energy vehicles (NEVs) worldwide. However, TINCI's development trajectory also reflects the pressures faced by the new energy vehicle industry over the past two years, including the challenges faced by battery and related component manufacturers. The company submitted its Hong Kong listing application last week. At the same time, the rise of new technologies such as sodium-ion batteries also poses challenges, as the industry is characterized by rapid product iteration and fierce competition. In response to these changes, TINCI has not remained stagnant but is actively developing products aimed at emerging fields. However, the rapid pace of industry changes also means that if other companies launch more competitive products, TINCI could be quickly surpassed, especially against the backdrop of Western governments attempting to regain dominance in the new energy industry. Despite the challenges, TINCI's overall positioning remains relatively robust. Unlike many new energy companies, the company has maintained good profitability over the past three years. Although profits significantly declined in 2024 during the peak of price wars triggered by oversupply, they rebounded last year. The company is also expanding into new business areas, including the production of chemicals used in daily chemical products such as shampoos and laundry detergents. However, the scale of this related business is still limited, and the capacity utilization rate of the relevant production lines remains low, at about 40%, reflecting that the company is still in the stage of expanding production and developing customers. From multiple perspectives, TINCI can be considered a veteran in the industry. The company was founded in 2000 by Xu Jinfeng, who is now 61 years old and belongs to the first generation of private entrepreneurs after China's reform and opening up. His deputy, Xu Sanshan (no familial relation), is 57 years old and also comes from this generation of entrepreneurs, having joined the company in 2010. Additionally, Gu Bin, who is 60 years old, has served as the company's Chief Financial Officer since 2007, which is uncommon in technology companies with frequent executive turnover. The company is the largest manufacturer of lithium-ion battery electrolyte materials globally, with a market share of 35.7%, leading electric vehicle giant BYD (15.6%). The third-ranked company is Shenzhen New Zhongbang (300037.SZ), with a market share of 13.8%, and has applied to go public in Hong Kong this January to supplement its existing listing in Shenzhen Large-scale Fundraising This IPO is expected to be large-scale, with almost certain fundraising exceeding $1 billion. The list of underwriters has released important signals, including global investment banking giant JP Morgan and leading Chinese brokerage CITIC Securities, indicating that this offering is likely to attract large institutional investors from both China and globally. Shenzhen Tinci Materials can be considered the most comparable peer, as it also primarily engages in battery materials business. Currently, Tinci Materials has a price-to-sales (P/S) ratio of about 5 times for its publicly listed shares in Shenzhen. If calculated at the same valuation level, Tinci Materials' valuation based on 2025 sales is approximately 83 billion yuan (about $12 billion). However, considering Tinci Materials' market-leading position, its valuation is expected to enjoy a premium over Tinci, and if the P/S ratio reaches about 7 times, the valuation could reach approximately 116 billion yuan. Next, we will take a more detailed look at Tinci Materials' financial performance, which shows a significant impact in 2024. The company is also taking measures to promote its business from primarily selling lithium-ion battery electrolyte materials to Chinese customers, gradually achieving diversification. The company's revenue in 2024 is expected to decline by 19% year-on-year to 12.5 billion yuan, mainly due to a significant drop of 45% in the average selling price of lithium-ion battery electrolytes compared to 2023. Last year, electrolyte prices further fell by 5.6%, but the prices of other products rose, driving the overall average selling price of lithium-ion battery materials up by 4.3% year-on-year. As prices stabilize, Tinci Materials is back on the path of revenue growth, with last year's revenue increasing by 33% year-on-year to 16.6 billion yuan. Approximately 96.2% of the revenue comes from the Chinese market. The company is actively expanding its overseas presence, having signed agreements last year to collaborate with the local government in Morocco to build a production base and establish another production base in the United States with local joint venture partners. The company also stated that it is increasing its efforts in the development of daily chemical materials, but this segment has only accounted for about 8% of revenue over the past three years, and its capacity utilization rate is relatively low. Tinci Materials is also aware that leading battery manufacturers such as CATL are focusing on alternative technologies like sodium-ion batteries, and is therefore accelerating the R&D of related electrolyte products. The company noted that it began producing sodium-ion battery electrolytes in 2024 and has received certification from several major battery manufacturers. Inventory is a somewhat concerning aspect for Tinci Materials, as its scale has continued to rise over the past year. By the end of last year, inventory increased by 19% year-on-year to 1.62 billion yuan, and in the first two months of 2026, it surged by another 36%, reaching 2.21 billion yuan by the end of February. However, the increase in inventory seems to reflect growing demand rather than weak demand, as evidenced by the continuous decline in the average inventory turnover days over the past three years. In terms of profitability, due to the significant drop in electrolyte prices, Tinci Materials' profit in 2024 is expected to decrease by more than two-thirds year-on-year to 478 million yuan. With prices stabilizing, last year's profit rebounded to 1.34 billion yuan. Overall, the outlook for the company's IPO is relatively positive. Its market-leading position, along with its proactive layout in regional distribution and emerging fields such as sodium-ion batteries, is expected to allow it to achieve a premium valuation compared to its peers. Additionally, the gradual stabilization of its business will help alleviate investors' concerns about future price pressures