In the rapidly expanding energy storage sector, Xiamen Hithium Energy Storage Technology Co., Ltd. ("Hithium") has emerged as an industry dark horse, ranking among global leaders with its surging shipments despite being founded just six years ago. However, as the company files its third listing application with the Hong Kong Stock Exchange, it faces multifaceted challenges including intellectual property disputes, legal battles, financial vulnerabilities, and overseas market uncertainties.
Recent data from Patent Research & Intellectual Property (PRIP) reveals that China's National Intellectual Property Administration has recorded 11 new patent invalidation challenges against Hithium. These developments complicate Hithium's IPO journey, with its patent stability under intense scrutiny amid rapid growth.
**I. Escalating Patent Challenges Test Core Technology** Since late July 2025, Hithium has faced 27 invalidation requests targeting 25 patents, including two patents challenged twice. (As of June 2025, Hithium held 4,336 global patent applications with 2,118 granted). Currently, most cases remain under review, with only one concluded due to petitioner withdrawal. All public cases are scheduled for oral hearings by January 2026.
Notably, the challengers—including Shenzhen Saierxi Biotechnology Co., Liu Bo, Zhang Lin, and Ren Lidan—appear unrelated to Hithium's core business. Industry analysts suggest these entities function as "straw men," exploiting China's patent system that allows any party to challenge patents, contrasting with stricter U.S. rules on standing requirements. While China recently amended its Patent Examination Guidelines to reject non-genuine invalidation requests effective January 2026, current challenges remain admissible, leaving Hithium vulnerable to strategic attacks on its technological moat.
**II. Legal Battles with CATL Compound Listing Risks** Hithium's legal conflicts with Contemporary Amperex Technology Co., Limited (CATL) have intensified since 2023. CATL has filed multiple lawsuits in Ningde Intermediate Court, alleging: - Unfair competition through Hithium founder Wu Zuyu's alleged violation of non-compete agreements - Misappropriation of CATL's proprietary technology (June 2025 lawsuit seeking ¥150 million damages) - Ownership disputes over nine patents allegedly developed by former CATL employees (September 2025 filings)
The situation escalated in July 2025 when Hithium's office director Feng Dengke was detained for suspected trade secret violations, with the case now entering prosecution. Under HKEX listing rules, such material litigation could delay or terminate Hithium's IPO if deemed to threaten operational continuity.
**III. Subsidy-Dependent Profitability and Cash Flow Strains** Hithium's financials reveal concerning trends: - Revenue growth: ¥3.615B (2022) → ¥10.202B (2023) → ¥12.917B (2024) → ¥6.971B (1H2025) - Net profit: -¥1.777B (2022), -¥1.975B (2023), ¥288M (2024), ¥213M (1H2025) - Government subsidies accounted for 143.75% of 2024 profits and 156.81% of 1H2025 profits
Balance sheet pressures include: - 74.95% debt-to-asset ratio (June 2025) - ¥10.97B outstanding loans, including ¥4.932B due within one year - Accounts receivable ballooned from ¥223M (2022) to ¥8.315B (2024), with collection cycles extending from 11.8 to 227.9 days - 80% receivables overdue beyond 60 days - Payable cycles stretched to 226.1 days, breaching 180-day supplier terms
**IV. Overseas Policy Shocks Disrupt Growth Engine** Hithium's high-margin international business (42.3% gross margin vs. domestic 8.1%) faces U.S. regulatory headwinds: - The U.S. Inflation Reduction Act's FEOC/PFE rules threaten tax credits for projects receiving "foreign entity" support post-March 31, 2025 - Localization requirements: 60% by 2026, 80% by 2030 for full credits - Hithium's U.S. factory lacks cell production capability and material traceability compliance - BMS algorithms risk "foreign influence" designation
Consequently, U.S. revenue contribution plunged to 11.78% in 1H2025 from 31.44% in 2H2024.
As competitors like Sungrow Power, EVE Energy, and others pursue Hong Kong listings, Hithium's ability to resolve its CATL disputes and financial vulnerabilities before HKEX hearings will determine its capital market access. Without addressing these structural risks, even strong short-term performance may succumb to domino-effect challenges.