Listing | Frontline of Entrepreneurship
Author | Duan Nannan
Editor | Feng Yu
Graphic Designer | Qian Qian
Reviewer | Song Wen

On February 14th, domestic leading positive electrode material company Longbiao Technology completed its board elections and executive appointments. As the company’s actual controller, Shi Junfeng continues to serve as Chairman and General Manager without surprise.

In 2025, due to booming sales of energy storage batteries and ongoing “anti-involution” efforts domestically, the prices of positive electrode materials have rebounded. Against this backdrop, Longbiao Technology’s losses in 2025 have decreased.

Notably, despite still being in a loss-making state, Hunan Yune, a leading positive electrode material company, is expected to achieve a net profit attributable to parent over 1.15 billion yuan in 2025, performing much better than Longbiao Technology.

Under the impact of continued losses and expansion, as of the first three quarters of 2025, Longbiao Technology’s asset-liability ratio has risen to 79.24%, a new high.

Fortunately, the company has recently signed several hundred-billion-yuan orders with clients such as CATL. With the support of major clients like CATL, can Longbiao Technology quickly escape its difficulties?

1. Product prices surge, but the company still continues to lose money

On January 30th, Longbiao Technology released its 2025 performance forecast. The announcement shows that in 2025, Longbiao Technology is expected to achieve a net profit attributable to parent of -180 million to -148 million yuan, while the company expects to achieve a non-recurring profit of -39.5 million to -29.2 million yuan.

By comparison, in 2024, Longbiao Technology’s net profit attributable to parent was -636 million yuan, and non-recurring net profit was -688 million yuan.

The company’s losses have narrowed, largely due to the rebound in positive electrode material prices. In the second half of 2025, thanks to explosive growth in energy storage battery shipments, demand for positive electrode materials increased significantly.

Data from GGII shows that in 2025, China’s lithium battery positive electrode material shipments reached 5.025 million tons, a 50% year-over-year increase. With shipment volumes continuing to rise, prices of positive electrode materials have been steadily recovering.

Taking lithium iron phosphate (LFP) positive electrode materials, which account for the largest share, as an example: in June 2025, the price of LFP positive electrode material briefly fell to around 30,000 yuan/ton. By the fourth quarter of 2025, prices surged significantly, reaching 57,300 yuan/ton by January 22, 2026.

Driven by rising prices of positive electrode materials, Longbiao Technology, with over 65% of revenue from these materials, has seen its losses significantly narrow.

However, compared to leading positive electrode material companies like Hunan Yune, Longbiao Technology’s profitability is relatively weak.

In 2025, Hunan Yune is expected to achieve a net profit attributable to parent of 1.15 to 1.4 billion yuan. Despite large losses in 2023 and 2024, Longbiao Technology only achieved net profits of 1.581 billion yuan and 594 million yuan respectively, in the same period.

The reason for Longbiao Technology’s weaker profitability compared to Hunan Yune largely relates to raw material layout, product positioning, and operational efficiency.

As an established positive electrode material company, Hunan Yune is far ahead in integrated production, not only providing positive electrode materials but also involved in phosphate and manganese chemicals, as well as lithium carbonate purification. This helps Hunan Yune effectively balance the impact of raw material price fluctuations.

In contrast, as a company that transitioned from lubricants into positive electrode materials, Longbiao Technology mainly relies on external procurement for core raw materials. For example, although prices of lithium iron phosphate (LFP) surged in Q4, the price of the core raw material—lithium carbonate—also rose sharply, offsetting the benefits of higher positive electrode material prices.

Additionally, because Hunan Yune has deep ties with top clients like CATL and BYD, and focuses on high-end products such as the CN5 and YN9 series of high-voltage density LFP products, its capacity utilization is extremely high, achieving full production and sales at lower costs than Longbiao Technology.

In the increasingly competitive positive electrode material market, controlling costs to maintain profitability is key to sustainable growth. From the current situation, Longbiao Technology still lags significantly behind leading companies.

We attempted to understand from Longbiao Technology why, despite a significant rebound in positive electrode material prices in Q4 2025, the company’s net profit attributable to parent still showed losses in Q4, according to its forecast. Why is this the case?

Compared to Hunan Yune, which has maintained stronger profitability, what strategies will Longbiao Technology adopt to control costs, improve gross margins, and enhance profitability? As of press time, Longbiao Technology has not responded.

2. Aggressive financing and expansion push asset-liability ratio near 80%

As a company that transitioned from lubricants to positive electrode materials, Longbiao Technology entered the positive electrode market relatively late. To quickly capture market share, it has been aggressively expanding over the past few years.

In October 2020, Longbiao Technology announced a 3 billion yuan investment agreement with Pengxi County to establish Sichuan Lithium Source New Materials Co., Ltd., launching a “large-scale production project for automotive power and energy storage battery positive electrode materials,” planning to build 150,000 tons/year of lithium iron phosphate (LFP) capacity in three phases.

Subsequently, Longbiao Technology continued investing in capacity expansion in Shandong, Hubei, Zhangjiagang, Indonesia, and other locations.

Due to the large investment amounts, to raise expansion funds, Longbiao Technology relied not only on capital market issuance but also on large-scale external borrowing.

Wind data shows that from 2021 to 2023, the company’s new short-term and long-term borrowings totaled 1.292 billion, 2.985 billion, and 2.453 billion yuan respectively.

With the large increase in debt, Longbiao Technology’s asset-liability ratio soared—from only 28.44% at the end of 2020 to 75.73% at the end of 2023.

High leverage limited further expansion, so to continue increasing capacity, Longbiao Technology successfully listed on the Hong Kong stock market in October 2024.

The IPO raised HKD 550 million, mainly used for the second phase of the Indonesian plant and new production lines at the Xiangyang plant.

Despite the listing and fundraising, the company’s asset-liability ratio did not decrease—in fact, it increased. On the eve of listing, September 30, 2024, the ratio was 76%.

After listing in Hong Kong, the ratio briefly declined but then increased again due to continued external borrowing, reaching 79.24% as of September 30, 2025.

It is noteworthy that a large portion of the company’s debt is interest-bearing. During the same period, total liabilities reached 14.61 billion yuan, with short-term borrowings, long-term borrowings, and current portion of non-current liabilities totaling over 9.527 billion yuan, accounting for over 65% of total liabilities.

High interest-bearing debt has come at a cost: in the first three quarters of 2025, interest expenses alone amounted to 152 million yuan, somewhat dragging down profits.

As of September 30, 2025, the company faces 2.208 billion yuan of non-current liabilities due within one year, plus over 2 billion yuan payable to suppliers in the short term. Meanwhile, the company holds 3.58 billion yuan in cash and 1.409 billion yuan in trading financial assets.

Thus, in the short term, Longbiao Technology faces significant debt repayment pressure.

Despite this, the company still plans to invest further to expand capacity.

On January 4, 2026, Longbiao Technology announced a plan to invest 2 billion yuan in a high-performance lithium battery positive electrode material project, funded by its own or self-raised capital. However, given the high asset-liability ratio, whether the company can secure sufficient funds for expansion remains uncertain.

We attempted to understand from Longbiao Technology why, with unused capacity, it still plans large-scale expansion. As of September 30, 2025, the asset-liability ratio exceeds 79%, and upcoming debt maturities are substantial. Does the company have enough funds to meet its debt obligations?

In January 2026, the company announced a plan to invest 2 billion yuan in high-performance lithium battery positive electrode materials. How will it raise these funds? Are bank loans and collateral assets sufficient? As of now, no response has been received.

3. Supplies to CATL, over 600 billion yuan in orders signed in the past six months

Although Longbiao Technology’s performance has been less than ideal in recent years, its signing of large orders in the second half of 2025 has rekindled investor hope for a turnaround.

On December 2, 2025, Longbiao Technology announced that its controlling subsidiary LBM New Energy (Asia Pacific) Pte. Ltd. (“Lithium Source (Asia Pacific)”) signed a “Long-term Procurement Agreement” with Sunwoda Automotive Energy Technology (Thailand) Co., Ltd. (“Sunwoda”).

The agreement stipulates that from 2026 to 2030, the subsidiary will sell 106,800 tons of lithium iron phosphate (LFP) positive electrode materials to the other party, with prices set monthly. Based on market prices, the total sales value is estimated at approximately 4.5 to 5.5 billion yuan.

Previously, Longbiao’s subsidiaries and controlling subsidiaries signed contracts to sell 1.3 million tons of LFP to various subsidiaries of ChuNeng New Energy from 2025 to 2030, with an estimated total value exceeding 45 billion yuan.

In September 2025, Longbiao also signed a cooperation agreement with CATL. The agreement states that from Q2 2026 to 2031, the company will sell 157,500 tons of compliant LFP to CATL’s overseas factories, with an estimated total order value exceeding 6 billion yuan based on market prices.

Earlier, Longbiao also sold 152,000 tons of LFP to Eve Energy and related companies, with a total contract value exceeding 5 billion yuan.

In total, the orders signed in the second half of 2025 alone amount to over 60 billion yuan.

Driven by continuous large orders and rising positive electrode material prices, Longbiao Technology’s stock performance has been strong—its share price has increased over 100% since the April 2025 low.

Despite the signing of numerous large orders, whether the company can truly escape its difficulties remains to be seen. As a cyclical industry, the price of positive electrode materials is influenced by downstream demand, capacity planning, and other factors.

Since 2023, due to industry overcapacity, prices of positive electrode materials have continued to decline. Although Longbiao’s shipment volume has increased, the falling prices mean the company still reports losses.

Data shows that in 2023 and 2024, the company’s positive electrode material sales were 108,100 tons and 178,300 tons respectively. During the same period, net profits attributable to parent were -1.233 billion and -636 million yuan.

Even with a significant rise in prices in the second half of 2025, Longbiao still expects to lose 148 million to 180 million yuan for the full year.

Therefore, despite signing large orders, whether the company can turn profitable depends on the execution prices of its products and whether it can achieve integrated production to hedge against upstream raw material price increases.

We attempted to understand from Longbiao whether the calculation of over 60 billion yuan in signed orders in the second half of 2025 is rigorous, especially since Rongbai Technology was questioned for overestimating order sizes due to calculation errors. Can the company meet the increased demand with its current capacity? If large-scale capacity expansion is needed, can it secure sufficient funds given its current debt levels and credit status?

Since these orders are long-term, their legal validity depends on contractual terms. If market changes lead to reduced customer demand and order cancellations, could this adversely affect the company? As of press time, no response has been received.

For Longbiao Technology, while positive electrode material prices have rebounded and losses have narrowed, the lack of integrated production, operational efficiency gaps compared to top players, and high interest-bearing debt keep the company in a challenging position. Its profitability remains weak compared to industry leaders like Hunan Yune.

Whether the company can turn losses into profits in the future largely depends on the continued rise of positive electrode material prices and the company’s ability to reduce production costs.

Note: The images in the article are from Shetu.com, based on VRF agreements.