Key takeaway

In 2025, the company recorded net profit attributable to shareholders of the parent company of RMB-821mn, YoY +39%, with losses significantly narrowed overall. In 1Q26, the company recorded net profit attributable to shareholders of the parent company of RMB265mn, YoY +259% and QoQ +196%, with profitability significantly improved. In 2025, the company’s sales volume of phosphate-based cathode materials reached280,000 tons, YoY +24.04%. In 1Q26, sales volume reached 89,300 tons, YoY +45.21%. Driven by both the power battery and energy storage markets, end demand remained strong. Benefiting from the recovery in LFP cathode processing fees and rising lithium prices, the company reached a profitability inflection point. In 1Q26, net profit attributable to shareholders of the parent company per ton of LFP cathode was about RMB3,000, with significant improvement both YoY and QoQ.

Event

The company released its 2025 annual report and 1Q26 report.

In 2025, the company recorded revenue of RMB8.716bn, YoY +14%. Net profit attributable to shareholders of the parent company was RMB-821mn, YoY +39%. Net profit after deducting non-recurring items was RMB-780mn, YoY +43%, with losses significantly narrowed.

Among them, in 4Q25 revenue was RMB2.680bn, YoY +148% and QoQ +24%. Net profit attributable to shareholders of the parent company was RMB-277mn, YoY +46% and QoQ -81%. Net profit after deducting non-recurring items was RMB-252mn, YoY +51% and QoQ -156%.

In 1Q26, the company recorded revenue of RMB4.336bn, YoY +116% and QoQ +62%. Net profit attributable to shareholders of the parent company was RMB265mn, YoY +259% and QoQ +196%. Net profit after deducting non-recurring items was RMB255mn, YoY +240% and QoQ +201%. Profitability significantly improved.

Quick Take

In terms of capacity, the company’s 80,000-ton capacity at the Yibin base was gradually put into operation this year. The company has built phosphate-based cathode material capacity of 450,000 tons per year. The company’ s lithium replenishment enhancer, as the world’s first mass-produced cathode lithium replenishment material, has built capacity of 5,000 tons per year. Both industrialization progress and capacity scale are at the forefront of the industry.

In terms of sales volume, in 2025 the company’s sales volume of phosphate-based cathode materials reached 280,000 tons, YoY +24.04%. In 1Q26, driven by both the power battery and energy storage markets, demand for the company’s products remained strong. Sales volume of phosphate-based cathode materials reached 89,300 tons, YoY +45.21%.

In terms of profitability, the company’s profits improved significantly. In 4Q25, the net profit attributable to shareholders of the parent company per ton of the company’s LFP cathode was about RMB-3,700. After excluding the impact of RMB-26mn in credit impairment losses and RMB-260mn in asset impairment losses, the operating net profit per ton was about RMB1,000, achieving a turnaround from loss to profit. In 1Q26, the net profit attributable to shareholders of the parent company per ton of the company’s LFP cathode was about RMB3,000, benefiting from the recovery of LFP cathode processing fees and gains from the rise in lithium carbonate prices, with significant improvements both YoY and QoQ.

In terms of new technologies, in the LMFP field, the shipment volume of the company’s fourth-generation high-compaction-density LFP products continues to increase. The company’s first-generation LMFP products have achieved batch vehicle installation, and the verification of the second-generation higher-performance LMFP products is progressing smoothly. In the field of lithium supplementation additives, the company has obtained exclusive designation from customers and maintained stable deliveries. For solid-state batteries, the company cooperates with leading solid-state battery manufacturers. As large-scale industrialization of solid-state batterie s progresses, shipments of the company’s lithium suppleme ntation additives will also increase. For sodium batteries, the company has developed a sodium supplementation additive to address the issue of low initial efficiency in sodium batteries, which is currently in the verification stage. In the high-compaction-density LFP field, the shipment volume of the company’s fourth-generation high-compaction-density LFP products continues to increase. The fifth-generation high-compaction-density LFP material has outstanding core performance indicators, with powder compaction density of 2.70–2.75 g/cm3 and electrode compaction density above 2.75 g/cm3. It is applicable to both power and energy storage fields and has passed pilot-scale validation.

Net profit attributable to shareholders of the parent company is estimated to reach RMB961mn, RMB1,202mn, and RMB1,404mn in 2026–2028, corresponding to PE of 19.8x, 15.8x, and 13.6x.

Risks

1) Risk of weaker-than-expected downstream demand: Sales volume may fall short of expectations due to weak demand, thereby affecting the shipment volume and profitability of the company’s related businesses.

2) The raw material prices may fluctuate more than expected: Since 2021, the prices of raw materials have shown high periodical volatility. The high upstream prices, combined with its volatility will affect terminal demand, and disrupt companies' performance in the short run. In particular, lithium carbonate is the core raw material for lithium iron phosphate cathode producers. If its price drops rapidly in a short period, the company will incur impairment losses.

3) The progress of the company's key projects is slower than expected: as a participant in the new energy sector, the progress of major projects is the key to supporting the revenue and profits, and is also a reflection of the company's growth potential. The slower-than-expected progress of major projects will affect its current and long-term performance.

4) Deteriorating competitive landscape and downside risk to processing fees: Currently, there are numerous capacity expansion plans within the industry, concentrated on commissioning and release from the second half of 2026 to 2027, which may lead to a deteriorating competitive landscape and downside risk to processing fees.