On September 3, Guangdong Jinsheng New Energy Co., Ltd. submitted its listing application to the main board of the Hong Kong Stock Exchange, with China International Capital Corporation and CMB International serving as joint sponsors.

Following the launch of Shenzhen Stock Exchange listing guidance in 2022 and the expiration of its Hong Kong Stock Exchange listing application in December 2024, this marks Guangdong Jinsheng New Energy's third attempt at going public.

Since 2022, the company has experienced continuous declines in revenue and net profit. In the first half of 2025, the company's gross margin turned positive, but its cash-to-short-term debt ratio remains below 2%, indicating significant debt pressure.

**Five Brothers' 20-Year Entrepreneurial Journey Worth 6 Billion Yuan**

Guangdong Jinsheng New Energy was established in 2010 by five Li brothers (Li Sen, Li Xin, Li Yao, Li Yan, and Li Wang) from Xinyi, Maoming, Guangdong Province.

The Li brothers' entrepreneurial journey began in the non-ferrous metals industry.

In 2005, the five co-founded Gaoyao Jinye Metal Development Co., Ltd., a company based in Zhaoqing, Guangdong Province, primarily engaged in non-ferrous metal smelting and rolling processing. The company was dissolved in July 2014.

In 2006, the brothers established Jinmao Changxing Copper Industry Co., Ltd.

In 2010, they founded Zhaoqing Jinsheng Metal Industry Co., Ltd., the predecessor of Guangdong Jinsheng New Energy, expanding their business from non-ferrous metal smelting and processing to electrical machinery and equipment manufacturing.

In 2014, Guangdong Jinsheng New Energy established a wholly-owned subsidiary, Jiangxi Ruida New Energy Technology Co., Ltd., in Yichun, Jiangxi, to develop lithium battery cathode materials and recycling and cascade utilization of retired power batteries from new energy vehicles.

This marked Guangdong Jinsheng New Energy's formal entry into the power battery recycling sector, gradually transforming into a lithium battery recycling and regeneration solution provider.

Currently, Guangdong Jinsheng New Energy's business chain covers retired lithium battery collection, hydrometallurgical regeneration, material preparation, and partial cascade utilization (low-speed small power/energy storage, etc.). Regenerated products mainly include battery-grade lithium carbonate, nickel sulfate, and cobalt sulfate, with expansion into ternary/iron phosphate precursors and lithium iron phosphate cathode materials.

The company positions itself primarily as a "third-party recycler" (non-integrated battery/vehicle manufacturer system).

According to Frost & Sullivan reports, based on 2024 regeneration and utilization sales revenue, the company ranks as the world's second-largest lithium battery recycling and regeneration enterprise (behind Brunp Recycling, a subsidiary of CATL) and the world's largest third-party lithium battery recycling and regeneration enterprise.

From July 2021 to February 2023, Guangdong Jinsheng New Energy completed four rounds of financing, raising over 1.2 billion yuan in total. Investors included prominent institutions such as CICC Capital, Fosun RZ Capital, Dachen Venture Capital, Guozhong Venture Capital, Cornerstone Capital, GAC, Shaanxi Auto, and Germany's Bosch.

In terms of shareholding structure, prior to this issuance, the Li brothers act as parties acting in concert, collectively controlling approximately 55.69% of the company's voting rights. Li Sen currently serves as Chairman and General Manager, Li Xin as Vice Chairman and Deputy General Manager, and Li Yao as Deputy General Manager.

In 2024, Guangdong Jinsheng New Energy was listed on the Hurun Global Unicorn List with a valuation of 12 billion yuan. Based on this calculation, the Li brothers' net worth exceeds 6 billion yuan.

**Positive Gross Margin in First Half, Tight Cash Flow**

The lithium battery recycling industry maintains high growth rates, though it exhibits obvious cyclicality. Over the past few years, Guangdong Jinsheng New Energy's performance has faced significant pressure.

From 2022 to 2024 and the first half of 2025, Guangdong Jinsheng New Energy achieved revenues of approximately 2.905 billion yuan, 2.892 billion yuan, 2.157 billion yuan, and 937 million yuan respectively, showing continuous decline. The first half of 2025 saw a 5.83% year-over-year decrease, mainly due to sharp drops in core product prices.

Additionally, regarding customer concentration, from 2022 to the first half of 2025, the company's top five customers accounted for 52.7%, 41.3%, 53.9%, and 67.3% of revenue respectively, showing increasing concentration.

From 2022 to 2024 and the first half of 2025, the company's gross profit was 416 million yuan, -158 million yuan, -88 million yuan, and 33 million yuan respectively. Net profit was approximately 151 million yuan, -471 million yuan, -344 million yuan, and -144 million yuan respectively, with cumulative losses of 808 million yuan. Losses in the first half of 2025 expanded year-over-year.

The core reason for losses was inventory impairment (cumulating to 198.8 million yuan) and pricing mismatch issues caused by plummeting lithium, nickel, and cobalt prices.

On the positive side, the company's gross margin turned positive in the first half of 2025, at approximately 3.5%, indicating that after extreme price declines, product pricing, inventory, and cost sides began to recover.

However, the company faces tight cash flow on the debt side. As of the end of June 2025, the company's cash and cash equivalents were only 36.61 million yuan, while bank and other loans due within one year reached 1.81 billion yuan, creating enormous short-term debt pressure.

In terms of industry competition, as an independent third party, Guangdong Jinsheng New Energy faces periodic disadvantages in raw material acquisition and pricing compared to integrated battery/vehicle manufacturer systems. Third-party recyclers must compete for materials through recycling networks, pricing mechanisms, and capital turnover capabilities, facing greater challenges during price upturns and more susceptibility to inventory price decline drag-downs.

Despite facing short-term challenges, the lithium battery recycling industry has broad long-term growth potential.

Power batteries typically have a lifespan of 5-7 years. China's electric vehicle industry began comprehensive growth in the second half of 2020, with large-scale battery retirement expected to begin in 2025. Frost & Sullivan reports predict that by 2031, global lithium battery recycling processing scale will reach 20.6 million tons, with a compound annual growth rate of 48.1% from 2024.

Regarding IPO proceeds, Guangdong Jinsheng New Energy plans to use funds for partial expenses related to constructing a base in Ganzhou, Jiangxi Province for processing retired lithium iron phosphate batteries; expanding upstream raw material resources; strengthening the company's R&D capabilities and talent attraction; and for working capital and general corporate purposes.

If Guangdong Jinsheng New Energy successfully lists and raises funds, it will help alleviate short-term debt pressure and leverage industry recovery and capacity expansion.