On June 15, Jiangsu Lopal Tech. Group Co.,Ltd. (SH: 603906), also known as LOPAL TECH, announced that its indirectly controlled subsidiary, Sichuan Lithium Source New Material Co., Ltd., is required to pay a total of RMB 28.61 million in supplementary value-added tax, additional surcharges, and late fees.

The company stated that, as of the date of the announcement, the full amount of the tax and late fees has been paid. This matter does not involve any administrative penalty. Furthermore, in accordance with the relevant provisions of Accounting Standard for Business Enterprises No. 28—Accounting Policies, Changes in Accounting Estimates and Corrections of Errors, this payment is not considered a prior period accounting error and does not require retrospective adjustment of previous financial data.

LOPAL TECH also indicated that the payment is expected to be recorded in the company's profit and loss for the 2026 fiscal year. The specific impact on the net profit attributable to shareholders of the listed company for 2026 will be based on the company's audited financial statements for that year. The company stated this tax payment issue will not affect its normal operations.

Company Background and Financial Performance

Founded in 2003 and headquartered in Nanjing, Jiangsu, the company was listed on the Shanghai Stock Exchange in 2017 and on the Hong Kong Stock Exchange in 2024. Its business segments include lithium battery materials (including lithium iron phosphate cathode materials, key materials for solid-state batteries, and sodium-ion battery materials), lithium carbonate refining, automotive chemicals, and hydrogen energy.

Notably, LOPAL TECH is a global leader in the production and sales volume of lithium iron phosphate cathode materials. This business segment once drove significant growth for the company. In 2022, its revenue surged to RMB 14.07 billion, with net profit exceeding RMB 1 billion.

However, starting in 2023, a reversal in supply and demand within the lithium battery industry led to a sharp downturn in LOPAL TECH's performance. Financial reports show the company has incurred losses for three consecutive years from 2023 to 2025, with net losses of RMB 1.234 billion, RMB 645 million, and RMB 173 million, respectively.

A strong industry recovery beginning last year helped LOPAL TECH significantly reduce its losses in 2025. In the first quarter of this year, the company returned to profitability, reporting revenue of RMB 3.497 billion, a year-on-year increase of 119.61%, and net profit attributable to shareholders of RMB 214 million, a surge of 925.71% compared to the same period last year.

Given this recovery momentum, the RMB 28.61 million tax payment is not expected to have a significant impact on LOPAL TECH's 2026 financial results.

As of the market close on June 16, shares of LOPAL TECH closed at RMB 25.74 per share, up 5.71%, with a total market capitalization of RMB 19.977 billion.