Preview of New Stock | Kunlun New Energy: Ranked among the top three globally in terms of electrolyte market share, performance continues to be in a state of continuous losses

In recent months, the lithium battery sector has experienced a series of short-term trading opportunities due to the rising price of lithium carbonate, with some stocks doubling in market value, attracting widespread investor attention. As one of the leading suppliers of lithium battery electrolytes, Kunlun New Energy has submitted listing information to the Hong Kong Stock Exchange. It is understood that Kunlun New Energy recently submitted an IPO application to the Main Board of the Hong Kong Stock Exchange, with China Securities Co., Ltd. International and Ping An Securities (Hong Kong) as its joint sponsors. The company is a global leading supplier of lithium battery electrolytes and, according to Frost & Sullivan, ranked third in the world in terms of market share among electrolyte suppliers by shipment volume in the first three quarters of 2025 with a 5.1% market share. The company focuses on the research, development, production, and sales of lithium battery electrolytes and advanced battery materials, with a comprehensive product portfolio covering electrolytes for power batteries, storage system batteries, consumer electronics batteries, and electrolytes for emerging applications. The company's performance has been volatile, with revenue growth of -35.3% in 2024 and 38.71% in the first three quarters of 2025, while shareholder net profits were losses of 0.05 billion yuan and 0.02 billion yuan respectively. As of November 2025, the company had cash and cash equivalents of 107 million yuan. The company's listing in Hong Kong coincided with the peak of the lithium battery sector and a downturn in sentiment. Therefore, can Kunlun New Energy's fundamentals withstand scrutiny and attract value investors? Industry maintains high growth, company ranks third in global market share Firstly, under the context of dual carbon, the penetration rate of new energy vehicles continues to increase, and the growth of energy storage batteries is doubling, which brings strong demand for lithium batteries. According to Frost & Sullivan, the global lithium battery shipment volume is expected to exceed 5,200 GWh by 2030, with a compound annual growth rate of 22.5%, driven by a 48% compound annual growth rate from 2020 to 2024. Benefiting from the high growth of lithium battery shipments, lithium battery electrolytes also maintain a high growth trend. In 2024, the global electrolyte market shipment volume reached 1.5 million tons, with a compound annual growth rate of 44.9% in the past five years, and is expected to reach 5.597 million tons by 2030, with a compound annual growth rate of 19.7%. Power battery electrolytes and storage battery electrolytes are the mainstream demand, with compound annual growth rates of 46.7% and 83.2% respectively, and are expected to reach 2.777 million tons and 2.244 million tons by 2030, accounting for 49.6% and 40.1% respectively. China is the world's largest lithium battery industry market, with an average global market share of over 60% in various segments of the industrial chain. In the field of lithium batteries, the global market share was 75.7% and 88% in 2024 in the field of electrolytes. China holds an important position in the global electrolyte industry, and lithium batteries are also expanding rapidly into new applications, including new scenarios such as Siasun Robot & Automation and low-altitude economic applications, which are expected to continue to drive demand and bring market opportunities to the electrolyte market. It is worth noting that solute is one of the core raw materials in the electrolyte, with lithium hexafluorophosphate as the mainstream solute, accounting for about 40%-50% of the raw material cost in the electrolyte. Due to the continuous sharp rise in the price of lithium hexafluorophosphate, significant profit pressures have been exerted on the electrolyte industry, leading to large increases in the prices of various types of electrolytes, such as lithium manganese oxide batteries, in the downstream. The market share of the lithium battery electrolyte industry is concentrated, with the top five electrolyte suppliers accounting for 60.8% of the market share by shipment volume in the first three quarters of 2025, with Kunlun New Energy ranking third with a 5.1% market share, while the first and second places have market shares of 36% and 11.3% respectively. Obviously, Kunlun New Energy's market share is relatively small, and its ability to pass on costs is weak, which puts the company on the edge of profitability. "Volume increase and price decrease" performance fluctuations, with over 70% of revenue contribution from the top five customers It is understood that Kunlun New Energy, established in 2004, is one of the earliest technology companies in China to research and produce lithium-ion power battery electrolytes. Its core product is lithium battery electrolyte, with a customer base covering leading companies in the fields of power batteries, energy storage system batteries, consumer electronics batteries, and emerging application scenarios. The company's electrolyte products include electrolytes for power batteries, energy storage batteries, consumer electronics batteries, and emerging application electrolytes. Power batteries and energy storage battery electrolytes are the mainstream products, contributing over 90% of the revenue. From 2023 to the first three quarters of 2025, the revenue shares of these two products were 77.7%, 76.8%, and 72%, and 11.9%, 15.8%, and 23.8% respectively. The demand for power batteries fluctuates significantly due to price and demand factors, while the demand for energy storage batteries is relatively resilient, achieving 120% growth in revenue share in the first three quarters of 2025. Specifically, Kunlun New Energy's electrolyte products include lithium iron phosphate electrolytes for power and energy storage batteries, high-voltage ternary electrolytes for power batteries, lithium cobalt oxide high-voltage electrolytes for consumer electronics batteries, and gel electrolytes for power, consumer electronics, and emerging application batteries. In addition, the company also has a variety of products such as ultra-low temperature electrolytes, flame retardant electrolytes, and oxide electrolytes. The company places a high value on research and development, establishing its own research and development bases in Xianghe County, Hebei Province, and Huzhou City, Zhejiang Province, with four dedicated research centers focusing on synthesis, electrolyte formulation, process development, and advanced research. They have successfully developed a number of leading proprietary electrolyte technologies, such as flame retardant electrolyte systems, high-nickel ternary and silicon-based cathode electrolyte technologies, and ultra-low temperature electrolyte technologies. As of September 30, 2025, the company had 139 registered patents in China and two registered patents in Japan, with ongoing research and development efforts being recognized by customers. Kunlun New Energy's customers mainly include manufacturers of lithium batteries for new energy vehicles and energy storage systems, with a slightly high customer concentration. The revenue contributions from the top five customers accounted for 82.1%, 73.0%, and 73.0% from 2023 to the first three quarters of 2025, with the largest customer contributing 60.1%, 59.3%, and 49.6% of revenue, respectively. As mentioned earlier, the company's competitiveness is relatively weak in terms of scale, and it shows a trend of "volume increase and price decrease" in electrolytes. In 2024 and the first three quarters of 2025, the company's electrolyte product sales volume increased by 15.2% and 66.7% respectively, but the average price fell by 43.3% and 17.6% respectively. The average prices of mainstream power and energy storage battery electrolytes were in a downward trend, but the average prices of consumer electronics and emerging application battery electrolytes increased. Upstream prices rose sharply at the beginning of the year, driven by demand, and it is expected to achieve a simultaneous increase in volume and price in the first quarter of 2026. In terms of production capacity, Kunlun New Energy has established strategically located production bases in Huzhou, Zhejiang, Yibin, Sichuan, and Jining, Shandong. As of January 18, 2026, the company's total electrolyte production capacity is 180,000 tons per year. In addition, the company plans to establish electrolyte production facilities in Yichang, Jining, Huzhou, Yibin, and Szolnok, Hungary, with a total annual electrolyte production capacity exceeding 500,000 tons after completion. The company is also actively exploring overseas markets, planning to build electrolyte production facilities in Hungary, collaborate with global leading battery companies to develop the Hungarian market and establish a European supply chain to improve local response speed and delivery capabilities. The company has a relatively healthy financial position, with non-current bank borrowings of 101 million yuan, current bank borrowings of 184 million yuan, totaling 285 million yuan, accounting for 13.34% of total assets as of September 2025. As of November 2025, the company only had 107 million yuan in cash, but had accounts receivable within one year amounting to 760 million yuan. In summary, Kunlun New Energy has performance expectations. On one hand, downstream demand is maintaining a stable growth rate, especially the explosion of energy storage batteries, driven by the tremendous demand for electricity in the AI era, with the company's energy storage battery applications becoming the core growth engine. On the other hand, after the price adjustments in the industry chain, profitability will improve, the company has a low interest-bearing debt, and the improvement in cash flow will assist the company's overseas expansion strategy. However, as the lithium battery sector is cyclical, and uncertainty remains as to whether the company can gain investor recognition after the downturn in investment sentiment.