Changhong Energy plans to raise no more than 903 million yuan to expand overseas production capacity

Baili News Flash (Reporter Shu Yajiang) On April 3, Sichuan Changhong New Energy Technology Co., Ltd. (hereinafter “Changhong Energy”) disclosed the 2026 annual stock offering for specific targets—an offering document (draft). The company plans to raise no more than RMB 903 million. Of this amount, RMB 803 million will be used for the high-aspect-ratio lithium battery Malaysia capacity expansion project to inject strong growth momentum. The remaining RMB 100 million will be used to supplement working capital and repay borrowings, optimizing the asset-liability structure and improving risk-resilience. This private placement has been viewed as precisely aligned with the Beijing Stock Exchange (BSE) refinancing package policy direction. It is not only a key move for Changhong Energy to focus on its core business and global expansion, but also provides a reference paradigm for BSE-listed small and midsize enterprises to strengthen their core business by leveraging capital markets.

Currently, the global high-aspect-ratio lithium battery industry’s business conditions continue to rise. As core supporting components in sectors such as electric power tools, clean tools, portable energy storage, and intelligent mobility, high-aspect-ratio lithium batteries enjoy strong market demand. With growth demands in emerging application areas such as drones, robots, and BBUs exploding, they have become an important growth point in the lithium battery industry’s sub-segments. Meanwhile, the industry’s competitive landscape has undergone profound changes, with the focus of competition shifting to profitability and core technology. With the funding raised in this private placement, Changhong Energy will concentrate on the high-aspect-ratio lithium battery core segment, aligning with the industry’s trend of high growth and high business momentum, laying a foundation for capturing market share and consolidating competitive advantages.

According to the announcement, of the funds proposed for this offering, RMB 803 million will be invested in the high-aspect-ratio lithium battery Malaysia capacity expansion project. The construction period will be 1.5 years. After reaching full production, it will add a total annual capacity of 170 million units of 18650 and 21700 series cells. This is both a key measure to address the current global mismatch between supply and demand for high-end lithium battery production capacity and to break through Changhong Energy’s own production capacity bottlenecks, and also a strategic move to align with the industry’s global expansion trend and hedge international trade risks.

Currently, China has already firmly established itself as a core global player in the lithium battery industry. Overseas markets have become an incremental core growth driver for domestic lithium battery companies. However, the industry also shows a pattern of excess production capacity in low- and mid-end segments, alongside a shortage in high-end capacity. As high-aspect-ratio lithium batteries serve as core components in areas such as electric power tools, demand is strong, and core consumer markets are concentrated in Europe and the United States. An overseas layout is therefore an inevitable choice to avoid trade barriers and to meet the localization production capacity requirements of core overseas customers.

From Changhong Energy’s existing production capacity, it is difficult to match the order demand from its continuing growth. Public information shows that by the end of 2025, the company’s production capacity utilization rate for high-aspect-ratio lithium batteries had exceeded 90%. If this overseas capacity expansion proceeds smoothly, it will effectively break through production capacity bottlenecks and provide support for fulfilling orders from international core customers.

According to the 2025 performance summary, Changhong Energy’s revenue achieved a year-on-year growth of 22% last year, while its net profit attributable to shareholders increased by 26% year-on-year. With strong growth momentum, the completion of overseas bases will further improve its “domestic + overseas” dual-base layout, helping the company capture a larger share in the global high-aspect-ratio lithium battery sub-segment market and aligning with industry development trends.

Analysts said that after this private placement is implemented, Changhong Energy is expected to further consolidate its leading advantages and risk-resilience in the high-aspect-ratio lithium battery sub-segment market. This move will also energize the Beijing Stock Exchange segment and help form a virtuous cycle of “policy-driven empowerment—capital support—industrial upgrading.” It will inject strong momentum into capital markets serving the real economy and promoting the development of new productive forces.

(Editor Guo Zhichen)