The leading lithium iron phosphate company that was short on funds right after its IPO has finally seen its private placement deal implemented—after the lithium battery market recovers, how will Hunan Yuyeng capture the upside?

It took two and a half years—from an initial 6.5 billion yuan down to nearly 4.8 billion yuan—during which there were two rounds of postponements, seven months of inquiries, and sustained downward pressure on the stock price. After all, Hunan Yuyang New Energy Battery Materials Co., Ltd. (hereinafter “Hunan Yuyang,” 301358.SZ), the world’s largest manufacturer of global phosphate cathode materials, has finally completed the share placement for its additional financing.

On the evening of April 3, Hunan Yuyang officially released the listing announcement for the shares to be issued to specific targets. According to the announcement, the company has completed all listing procedures for the shares issued to specific targets, which marks the final closing of the refinancing work initiated in August 2023. It is worth noting that this additional share placement was launched shortly after the company’s listing on the ChiNext Market. At that time, it had just raised nearly 4.5 billion yuan in IPO proceeds.

Based on the report on the issuance situation, the final number of issuance targets was determined to be 18, the issuance quantity was 82,537,493 shares, the issuance price was 58.01 yuan per share, the total amount of funds to be raised was 4,787,999,968.93 yuan, the net proceeds after deducting issuance expenses were 4,732,189,703.85 yuan, and the lock-up periods for all shares were 6 months. The lead underwriter for this issuance was CITIC Construction Investment Securities; the joint lead underwriters were CITIC Securities and Caixin Securities.

The proceeds from the fund-raising will be used entirely for the 320,000-ton annual lithium manganese iron phosphate project, the 75,000-ton annual ultra-long cycle lithium iron phosphate project, the 100,000-ton annual lithium phosphate project, and to replenish working capital.

Hunan Yuyang is one of China’s major suppliers of lithium-ion battery cathode materials. Founded in 2016, it was listed on the ChiNext Market in February 2023. At that time, the opening price was 63.2 yuan, and the gain on the first trading day reached 165.88%. As early as December 2020, Hunan Yuyang increased capital and expanded its equity, and introduced its major customers—CATL (300750.SZ/03750.HK) and BYD (002594.SZ/01211.HK)—as strategic investors. As of September 2025, CATL holds 7.87% of the shares, and BYD holds 2.94%.

The performance of cathode materials largely determines the battery’s energy density, lifespan, safety, and application fields, and they account for the highest cost proportion among lithium-ion batteries. As a phosphate cathode materials supplier, Hunan Yuyang has already achieved a six-year consecutive lead in annual shipment volume.

According to statistics from EVTank, in 2025 China’s overall cathode materials shipments reached 4.987 million tons, up 51.5% year on year. Among them, shipments of lithium iron phosphate cathode materials reached 3.944 million tons, up 62.5% year on year, and its share increased to 79.1%. Hunan Yuyang alone, with shipments of over 1 million tons, is far ahead and has become the absolute leader.

However, due to the industry’s cyclicality, after its listing, investors referred to Hunan Yuyang as having “performance turnaround.” The company’s performance peak, with net profit attributable to shareholders in 2022 prior to listing, reached 3.01 billion yuan; in its first year after listing, it fell sharply by 47.4% to 1.58 billion yuan. In 2024, it dropped again by 62.5% to only 594 million yuan, and over the two years, cumulative net profit shrank by more than 80%.

Including Hunan Yuyang, cathode materials companies generally saw a cliff-like drop in performance, mainly due to factors such as the plunge in lithium carbonate prices and a price war triggered by excess industry capacity. Battery-grade lithium carbonate (inclusive of tax) has experienced a “roller-coaster ride” in recent years: from a low point of about 400,000 yuan/ton in 2020, it continued to rise sharply and broke through 600,000 yuan/ton in November 2022; then, influenced by factors including industry destocking and market sentiment, it quickly fell to a price low of about 100,000 yuan/ton in December 2023. In 2024, it gradually stabilized and then declined to 70,000—80,000 yuan/ton; in 2025, it even dipped again to around 60,000 yuan/ton.

Driven by the surge in energy storage demand, the lithium battery industry chain bid farewell to deep adjustments in the second half of 2025 and entered a recovery phase. By the end of the year, the price of lithium carbonate rose to above 120,000 yuan/ton, with an annual average price of about 80,000 yuan/ton. Hunan Yuyang’s previously disclosed earnings forecast shows that the company expects that in 2025, its net profit attributable to shareholders of the listed company will be 1.15 billion—1.40 billion yuan, representing year-on-year growth of 93.75%—135.87%.

On the company’s explanation for its substantial improvement in performance, Hunan Yuyang said that the rapid development of the new energy vehicle and energy storage markets drove growth in demand for cathode materials, and that there has also been a structural shortage of supply. As a result, the sales volume of the company’s phosphate cathode material products increased significantly, especially because the company’s new products precisely matched the downstream market’s upgrade requirements for lithium batteries with higher energy density, stronger fast-charging performance, and larger cell capacity.

According to the data disclosed by the company, as of September 2025, its production capacity was 68.21 hundred thousand tons, its production output was 77.90 hundred thousand tons, and it is operating at full production and full sales.

However, it is worth noting that since last year, affected by the industry’s recovery, “large orders” have appeared one after another across the supply chain. For example, Rongbai Technology (rights protection) (688005.SH) and Funay Precision (300432.SZ), among others, have successively secured CATL’s multi-million-ton long-term orders. Meanwhile, in the past few years, Hunan Yuyang, whose revenue has been highly dependent on CATL and BYD, has appeared rather quiet. From 2025 to date, there have been no officially announced major new long-term cooperation agreements, and the company’s position in the core customers’ supply chains has been questioned by the market.

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