HK Stock Market Move | Jiangsu Lopal Tech. (02465) rose by nearly 12% in early trading. Institutional sources said that the demand for lithium iron phosphate is continuing to be strong, but it is difficult to push up prices.

Jiangsu Lopal Tech. (02465) rose nearly 12% in early trading, rising 9.45% as of the time of drafting, to HK$4.98, with a trading volume of HK$62.7429 million. Xiangcai Securities released a research report stating that demand remains strong, with smooth shipments from lithium iron battery companies, major factories ramping up production, top companies having full order books, and small and medium-sized companies that were previously shut down still not back to work. The capacity utilization rate of top companies remains at around 8-9%, with some companies operating at full capacity. Lithium iron inventories decreased slightly during the week, with companies focusing on reducing inventory due to continued cash flow pressure, shortening order cycles leading to cautious production, and maintaining low inventory levels. With strong production and sales, sentiment in the industry is gradually turning positive, but recent fluctuations in lithium carbonate prices, lack of cost support, and difficulty in pushing up lithium iron prices are limiting the increase in realized prices. Huachuang Securities pointed out that Jiangsu Lopal Tech. is a leading player in lubricants and automotive urea. In 2021, it acquired 100% of the shares of BTR's subsidiaries BTR (Tianjin) and Jiangsu BTR, and set up subsidiaries in Sichuan and Jiangsu to invest in lithium iron phosphate production lines, entering the lithium iron phosphate cathode field. BTR's downstream customers include major battery manufacturers such as Contemporary Amperex Technology and BYD Company Limited. By acquiring a leading company, the company has a customer advantage in the lithium iron phosphate industry compared to companies transitioning from titanium dioxide or phosphorus chemical industry. This will significantly reduce the product development cycle and may benefit from the current lithium iron phosphate boom cycle more quickly.