A recent viral video showing an employee running naked at a Chinese battery plant has brought REPT BATTERO under the spotlight, but the incident merely scratches the surface of deeper financial and operational issues.

The company's gross margin has consistently lagged behind peers such as 蔚蓝锂芯, 鹏辉能源, and 中创新航. Furthermore, extensive related-party transactions with its major shareholder, Tsingshan Holdings, may mean the true cost structure is even less favorable than reported, making the actual gross margin potentially lower.

Compounding these concerns, REPT BATTERO's research and development spending as a proportion of revenue has fallen sharply, leaving it behind competitors in critical areas like solid-state batteries and sodium-ion technology. Despite raising funds through two equity offerings since its 2023 Hong Kong listing, the company's debt ratio has surged to a record high, casting a shadow over its financial stability.

Gross Margin Lags Industry While Related-Party Transactions May Mask Costs

On September 10, REPT BATTERO issued a statement regarding the widely circulated video. The company confirmed the footage was recorded at its Jiashan facility, explaining that an employee, who had requested immediate resignation for personal reasons, became emotionally distressed after failing to agree on the departure date, leading to the extreme behavior. The matter was resolved on the same day with police oversight, and the company refuted online claims of restricting bathroom breaks, stating it had reported the incident to authorities.

While this specific event was quickly clarified, the underlying issues it exposed are more concerning. In the first half of the year, REPT BATTERO reported revenue of RMB 14.92 billion, a 57.2% year-over-year increase, and a net profit attributable to shareholders of RMB 704 million, a turnaround from a loss of RMB 65 million in the same period last year.

However, a comparison with industry peers reveals a significant gap in profitability. In the first half, 蔚蓝锂芯 achieved a gross margin of 20.3%, 鹏辉能源 19.6%, and 中创新航 16.7%. Although REPT BATTERO's gross margin improved to 13.3% from 8.7% a year earlier, it still remains the lowest among its listed competitors, a trend that has persisted for years.

Weak pricing power is a core reason for this underperformance. For instance, the average price of REPT BATTERO's power batteries is approximately RMB 0.34 per Wh, only 77% of 中创新航's RMB 0.44 per Wh.

More critically, the rapid expansion of related-party transactions with its major shareholder, Tsingshan Holdings, raises questions about the accuracy of its reported costs. In April 2026, REPT BATTERO signed a framework agreement with Tsingshan, setting related-party transaction caps of RMB 3.84 billion, RMB 8.94 billion, and RMB 13.62 billion for 2026, 2027, and 2028 respectively, totaling as much as RMB 26.39 billion over three years.

In the first half of this year, related-party purchases amounted to RMB 875 million, a 271% surge year-over-year, while related-party sales reached RMB 836 million, up 287%, signaling explosive growth in these transactions. The most significant cost component is energy supply at the Indonesia Weda Bay Industrial Park. As the park's exclusive service provider, Tsingshan supplies all essential production inputs to REPT BATTERO's Indonesian base, including electricity, steam, and port services. The self-owned coal-fired power plant in the park generates electricity at roughly RMB 0.29 per kWh, nearly half the cost of the national grid's industrial tariff of RMB 0.43-0.57 per kWh.

This suggests that REPT BATTERO's cost advantage is largely derived from the resource preference provided by its major shareholder's industrial park, rather than from internal improvements in supply chain management or production efficiency, implying that its real gross margin may be even lower than the reported figure.

R&D Investment Falls Sharply Despite Two Fundraisings Totaling RMB 2.7 Billion, Debt Ratio Hits New High

The lithium battery industry is a typical technology-driven cyclical sector, where R&D investment and technological reserves determine a company's ability to navigate cycles. In the first half of 2026, REPT BATTERO's R&D expenses totaled RMB 417 million, representing only 2.8% of revenue, a decline from 3.75% in the same period of 2025. This marks a notable downward trend over the past two years and places the company at the lowest level among its comparable peers.

The company is also falling behind in the race to industrialize next-generation battery technologies. In the solid-state battery arena, REPT BATTERO has only disclosed parameters for mixed solid-liquid batteries and around a dozen related patents. While it leads a provincial all-solid-state research project in Zhejiang, it has no pilot production line or mass production plans in place. In the sodium-ion battery field, its half-year report mentions sodium batteries only twice, and in a general manner, indicating it has lost its first-mover advantage as sodium batteries move from concept to GWh-scale commercial deployment.

In December 2023, REPT BATTERO was listed on the Hong Kong Stock Exchange, raising RMB 1.93 billion for capacity expansion, core technology R&D, working capital, and general corporate purposes. In October 2025, the company announced another placement to raise RMB 800 million, intended for new and expanded production capacity and to supplement working capital.

As of the end of June 2026, REPT BATTERO's debt-to-asset ratio stood at 77.11%, up 3.65 percentage points year-over-year and 2.62 percentage points higher than at the beginning of the year, reaching a record high. Despite consecutive fundraising efforts, its debt ratio remains higher than those of 蔚蓝锂芯, 鹏辉能源, and 中创新航.

The recent employee incident, while seemingly trivial, serves as a small yet telling signal that the problems at hand are not merely personal. As competition in the energy storage market, particularly in the residential segment, intensifies, REPT BATTERO may face even greater operational pressure ahead.