Guangzhou Tinci Materials Technology Co. Ltd. (002709.SZ) received approval from the China Securities Regulatory Commission (CSRC) for its Hong Kong listing, ending a year-long regulatory review. The world’s top electrolyte supplier plans to sell about 413 million shares in the deal.

The regulator granted consent on August 18, following additional inquiries into the company’s shareholding structure and litigation. Tinci initially applied last October. The approval comes as the company navigates a volatile market, with its Shenzhen-listed shares rising 2.4% over three trading days post-announcement.

Financial Performance and Market Position

Tinci holds roughly 36% of the global electrolyte market. Its financial results have fluctuated significantly amid oversupply concerns in the EV battery sector. In 2024, net profit fell 74.4% to 483.9 million yuan from 1.89 billion yuan in 2023. Revenue also declined 18.7% to 12.52 billion yuan.

However, metrics rebounded in the subsequent period. Revenue grew 33% to 16.7 billion yuan, while profit nearly tripled to 1.36 billion yuan. Year-to-date performance shows mixed signals: revenue surged 91% in the first quarter and 127% in the second quarter year-on-year. Conversely, profit rose just 5.2% in the second quarter, following a more than 10-fold increase in the first.

What the Numbers Show

Revenue growth is significantly outpacing profit expansion in the current year. While revenue jumped 127% in the second quarter, profit increased by only 5.2%. This divergence suggests margin compression or higher input costs, consistent with the source’s mention of falling prices and rising competition in the lithium battery materials sector.

Business Diversification and Capacity

The company supplied eight of the top 10 global battery manufacturers and nine of the top 10 consumer battery makers. It is expanding capacity with 200,000 tons planned for Texas and 150,000 tons for Morocco over the next two years, adding to its current 860,000-ton annual capacity.

Diversification efforts remain minor. Specialty chemicals for personal care generated 686 million yuan in the first half of the year, representing just 4.7% of total revenue. Core lithium-ion battery materials accounted for 93% of revenue, rising 117.2% year-on-year to 13.69 billion yuan.

Regulatory Context

The lengthy review reflects broader tightening by Chinese and Hong Kong regulators. The CSRC and Hong Kong’s Securities and Futures Commission have increased disclosure requirements. Recent reforms allow confidential filings, which Tinci may have utilized. The company has not yet submitted an updated public prospectus to the Hong Kong Stock Exchange.