Pending litigation, enormous financial pressure, fierce competition from industry giants, uncertain overseas risks, and insufficient R&D investment have made Haichen Energy Storage's IPO journey full of uncertainties.

In March 2025, Haichen Energy Storage submitted its prospectus to the Hong Kong Stock Exchange. At this critical juncture, Contemporary Amperex Technology Co.,Ltd. filed a lawsuit against the company, claiming 150 million yuan in damages for "unfair competition."

According to Hong Kong Stock Exchange regulations, prospectuses are valid for only six months. Haichen Energy Storage's prospectus will expire in less than a month, but there has been no new progress in its listing process. The much-anticipated "Ning-Hai battle" was scheduled for court hearing on August 12th but failed to proceed as planned.

Beyond CATL's patent litigation offensive, Haichen Energy Storage faces significant controversies: Is the strategy of sacrificing profits to capture market share sustainable? With cash flow pressures mounting, how would the company handle its 73% debt ratio if the IPO fails? With R&D investment representing only a fraction of industry giants' spending, where are its competitive advantages as industry competition intensifies? How can it resolve overseas market challenges?

The good news: Haichen Energy Storage successfully won a bid on August 17th for Saudi Electricity Company's (SEC) 1GW/4GWh battery energy storage system project, valued at approximately 2.6 billion yuan, with the company primarily responsible for equipment supply and operations.

**01 CATL's Dual-Pronged Attack**

In July 2025, Contemporary Amperex Technology Co.,Ltd. sued founder Wu Zuyu and his company Haichen Energy Storage for "repetitive technical routes and unfair competition."

A major focus of this lawsuit centers on the sensitive area of talent mobility.

Haichen Energy Storage, which "originated from" Contemporary Amperex Technology Co.,Ltd., is called "mini-CATL" in the industry:

- Founder Wu Zuyu: Worked at Contemporary Amperex Technology Co.,Ltd. for 8 years, filed composite current collector-related patents as the first inventor in 2018 - Executive Director Yi Ziqi: Worked at Contemporary Amperex Technology Co.,Ltd. for 1 year - Deputy General Manager Pang Wenjie: Worked at Contemporary Amperex Technology Co.,Ltd. for 3 years

Two years ago, industry giant Contemporary Amperex Technology Co.,Ltd. was already dissatisfied with storage newcomer Haichen Energy Storage's talent poaching.

In 2023, founder Wu Zuyu was ordered to pay 1 million yuan in breach of contract damages for violating non-compete agreements. Contemporary Amperex Technology Co.,Ltd.'s legal representatives accused Wu Zuyu of "massively poaching Contemporary Amperex Technology Co.,Ltd.'s core technical talent," claiming the damages "far exceed a mere 1 million yuan."

This talent war has now escalated from civil litigation to criminal cases.

In July this year, Feng Dengke, Haichen Energy Storage's Presidential Office Director and former Contemporary Amperex Technology Co.,Ltd. employee, was detained by police on suspicion of trade secret infringement. This case reportedly originated from Contemporary Amperex Technology Co.,Ltd.'s complaint.

Contemporary Amperex Technology Co.,Ltd. disclosed that after leaving the company, Feng Dengke used the alias "Engineer Ma" to infiltrate supplier Jinmei New Materials, deeply participating in Contemporary Amperex Technology Co.,Ltd.'s composite current collector OEM projects, allegedly stealing core technical information.

Patent litigation represents the "main battlefield."

In April 2025, Haichen Energy Storage high-profile launched its 587Ah energy storage battery and partnered with supply chain companies to establish new industry standards. Just two months later, Contemporary Amperex Technology Co.,Ltd. quickly launched mass-produced products with remarkably similar parameters.

Contemporary Amperex Technology Co.,Ltd. claims that Haichen Energy Storage's products differ from its patented batteries by only 4.4% in energy density, far below the industry-recognized 10% technology generation threshold, constituting suspected technical infringement.

In recent years, Contemporary Amperex Technology Co.,Ltd. has also used patent litigation to target multiple competitors including Tafel, CALB, and SVOLT Energy.

What does this lawsuit mean for Haichen Energy Storage?

587Ah large-capacity batteries are considered the next-generation strategic high ground in the energy storage industry. Contemporary Amperex Technology Co.,Ltd. seeks 150 million yuan in damages. Haichen Energy Storage just turned profitable in 2024 with net profit of 288 million yuan.

Industry insiders state bluntly: if they lose the case, at minimum they face substantial compensation, at worst severe damage to products and market position.

Hong Kong Stock Exchange listing rules require companies to prove "litigation does not affect continuing operations." If they lose the case or the Feng Dengke case establishes company liability, Haichen Energy Storage's IPO plans could be terminated.

In March this year, Haichen Energy Storage warned in its prospectus: "We cannot guarantee that the company will not be affected by unfair business competition or abuse of market dominance by third parties in the future."

On August 12th, during the IPO application period, facing mounting pressure, Haichen Energy Storage again issued statements through its WeChat public account, attempting to clarify patent infringement disputes.

**02 "Haichen Speed" Dependent on Capital and Low Pricing**

Founded in 2019, Haichen Energy Storage reached a valuation exceeding 23 billion yuan by 2023, and secured the third position globally in energy storage markets by 2024.

Behind Contemporary Amperex Technology Co.,Ltd.'s aggressive targeting lies this storage newcomer's rapid capture of industry market share.

Chronologically, Haichen Energy Storage began mass-producing 280Ah storage batteries in 2021, entered European and American markets in 2022, launched its first 1000Ah+ long-duration storage battery in 2023, and released 20,000-cycle sodium-ion batteries in 2024. By end-2024, the company's workforce exceeded 7,000 people.

Fixed assets surged from 3.4 billion yuan in 2022 to 10 billion yuan by end-2024, nearly 200% growth in two years. By end-2024, the company established three major domestic production bases in Xiamen, Chongqing, and Heze, plus a Texas factory forming a global capacity matrix.

In terms of capacity and market share, Haichen Energy Storage's total storage battery capacity grew from 5.4GWh in 2022 to 49.7GWh in 2024, with shipment volume achieving nearly 170% compound annual growth over three years. By end-2024, designed capacity reached 62GWh. According to the prospectus, total designed annual capacity is expected to exceed 100GWh by 2026.

In 2024, Haichen Energy Storage ranked third globally in energy storage markets with 35.1GWh shipments, capturing 11% global market share. The leader was Contemporary Amperex Technology Co.,Ltd. with 93GWh shipments. In H1 2025, according to authoritative institution InfoLink, Haichen Energy Storage has risen to second place globally in energy storage shipments.

Why has Haichen Energy Storage emerged as a formidable force in just five years, making even "King Ning" wary?

First, technically, "from follower to standard-setter."

The energy storage battery market has long suffered from "specification chaos," with manufacturers offering varying sizes, capacities, and interface designs, leading to poor system compatibility and high integration costs.

Contemporary Amperex Technology Co.,Ltd.'s pioneering 280Ah cells became the de facto industry standard in recent years, while Haichen Energy Storage seeks to redefine next-generation product standards through its 314Ah and especially 587Ah cells.

Second, rapidly capturing domestic market share through price competition.

From 2022 to 2024, Haichen Energy Storage's gross margins ranged 11%-18%, while Contemporary Amperex Technology Co.,Ltd.'s energy storage gross margins were 17%-27%, and EVE Energy's were 14%-17%.

Taking 2022 as an example, Haichen Energy Storage's domestic gross margin was 11%, Contemporary Amperex Technology Co.,Ltd.'s domestic gross margin was 21%, and EVE Energy's was 15.5%. Haichen Energy Storage was 90% lower than Contemporary Amperex Technology Co.,Ltd. and 40% lower than EVE Energy. By 2024, Haichen Energy Storage's mainland gross margin had dropped to approximately 8%.

In terms of unit selling prices, in 2023, Haichen Energy Storage was 0.368 yuan lower per Wh than Contemporary Amperex Technology Co.,Ltd. and 0.1 yuan lower than EVE Energy.

Low pricing enabled Haichen Energy Storage to rapidly capture market share, with lithium-ion storage battery shipments surging from 3.3GWh in 2022 to 35.1GWh in 2024, a 167% compound annual growth rate.

Third, continuous financing and aggressive borrowing for rapid territorial expansion.

Energy storage is a capital and technology-intensive industry. Haichen Energy Storage's expansion relies heavily on strong capital support.

On one hand, through equity financing, completing four funding rounds in just over two years, raising a total of 8 billion yuan in "ammunition."

On the other hand, through a "big borrowing, big repayment" model to alleviate capital hunger: borrowed 6.3 billion yuan from banks in 2023, repaying 1.3 billion yuan; borrowed 5 billion yuan in 2024, repaying 3.2 billion yuan.

Additionally, in 2023, Haichen Energy Storage signed strategic cooperation agreements with multiple banks, securing cumulative credit lines not exceeding 58 billion yuan.

Fourth, targeting overseas markets and carving out international territories.

Haichen Energy Storage's overseas revenue was nearly zero in 2022 but reached 3.7 billion yuan in 2024, accounting for nearly 30% of total revenue. US customers contributed over 60%.

This rapid overseas breakthrough not only broadened revenue sources but also brought significantly higher gross margins than domestic markets, with overseas gross margins reaching 42%.

**03 Hidden Risks Behind Frantic Expansion**

"Haichen Speed" has also created enormous hidden risks.

Financial pressure tops the list.

Despite achieving three consecutive years of revenue growth exceeding 10 billion yuan from 2022 to 2024, Haichen Energy Storage's "price-for-volume" strategy hasn't yet generated sustainable profits.

The company posted losses of 1.78 billion yuan and 1.98 billion yuan in 2022 and 2023 respectively, achieving 288 million yuan profit in 2024, but after excluding over 400 million yuan in government subsidies, still recorded nearly 100 million yuan in losses.

Large amounts of "credit sales" have created enormous cash flow pressures.

From 2022 to 2024, accounts receivable (net of impairment provisions) surged from 223 million yuan to 8 billion yuan, rising from approximately 6% of revenue to 64%. This means in 2024, 64 yuan of every 100 yuan in revenue was "on credit."

Accounts receivable turnover days also increased from 11.8 days in 2022 to nearly 186 days in 2024.

Operating cash flows were -260 million yuan and -1.7 billion yuan in 2022 and 2023 respectively. Though improving to 100 million yuan in 2024, this remains insufficient to support expansion needs.

The debt ratio exceeded 110% in 2022, dropping to 73% in 2024, but total debt climbed from 11.6 billion yuan to approximately 23 billion yuan. This ratio significantly exceeds Contemporary Amperex Technology Co.,Ltd. (65%) and EVE Energy (60%) for the same period.

More critically, Haichen Energy Storage needs to repay nearly 3.7 billion yuan in loans within one year in 2024, with long-term borrowings reaching 6.3 billion yuan, while cash on hand totaled only approximately 4.3 billion yuan.

Second, escalating arms race in the energy storage sector.

Contemporary Amperex Technology Co.,Ltd. had 219GWh under construction by end-2024, raising 41 billion Hong Kong dollars through Hong Kong listing in 2025, with 90% allocated to a 100GWh capacity project in Hungary, further consolidating European markets.

EVE Energy's 60GWh energy storage super factory began production in 2024, raising 5 billion yuan through convertible bonds in March 2025, with 3.1 billion yuan for 23GWh energy storage battery projects, and quickly launching Hong Kong IPO plans to raise 30 billion Hong Kong dollars three months later, accelerating global expansion.

Facing giant offensive moves, Haichen Energy Storage cannot fall behind: Shandong base (30GWh batteries + 20GWh systems) with 7.2 billion yuan total investment, Chongqing base (56GWh batteries + 22GWh systems) with approximately 13 billion yuan investment, Texas base (10GWh energy storage systems) with approximately $100 million investment, totaling 21 billion yuan across three bases built and under construction.

Haichen Energy Storage "aspires" in its prospectus: total designed annual capacity expected to exceed 100GWh by 2026.

The prospectus outlines plans to raise $500 million for capacity expansion, new product R&D, and overseas market expansion. Successful financing will directly impact its global expansion journey.

Third, R&D investment "falls short."

Current energy storage technology competition focuses on four dimensions: large-capacity cell iteration, long-duration storage adaptation, system integration and intelligence, and patent portfolio.

As a "latecomer," Haichen Energy Storage has "first-launched" ahead of industry giants at multiple critical technology nodes. However, its R&D investment shows clear declining trends, dropping from 5.4% of revenue in 2022 to 4.1% in 2024.

In contrast, Contemporary Amperex Technology Co.,Ltd.'s R&D ratio increased from 4.7% to over 5% during the same period, while EVE Energy's R&D ratio remained stable around 6%.

In absolute terms, from 2022 to 2024, Contemporary Amperex Technology Co.,Ltd. and EVE Energy spent 52.5 billion yuan and 7.8 billion yuan respectively on R&D. During the same period, Haichen Energy Storage's total was only 1.2 billion yuan, merely 2% and 15% of the former two.

Fourth, major overseas customer bankruptcy.

Compared to domestic 8% margins, overseas margins exceeding 40% are critically important to Haichen Energy Storage.

However, its overseas business heavily depends on few large customers.

The prospectus shows 2024 overseas revenue of 3.7 billion yuan, accounting for 28.6% of total revenue, with US customers contributing over 60%.

The top two US customers contributed nearly 3 billion yuan, representing 80% of total overseas revenue. Market speculation suggests the largest customer is US energy storage integrator Powin. However, Powin recently filed for bankruptcy in US courts and implemented massive layoffs.

Last year, Haichen Energy Storage signed a 1.5 billion yuan framework agreement with Powin for 5GWh battery procurement, its largest overseas order in 2024. Haichen Energy Storage responded that "no creditor-debtor relationship exists with Powin," but didn't address the subsequent arrangements for the 1.5 billion yuan battery order.

Meanwhile, increasingly restrictive US industrial policies and tariff barriers make overseas expansion increasingly difficult, severely compressing profit margins.

Haichen Energy Storage plans to invest $100 million in Texas factory construction to circumvent barriers, but long construction periods and high costs cannot quickly alleviate current pressures. More concerning is that the US energy storage market may contract after the "rush installation" wave ends in late 2025, with risks of over-dependence on single overseas markets being self-evident.

Competitors are also focusing on overseas expansion, with Contemporary Amperex Technology Co.,Ltd. building factories in Hungary and EVE Energy accelerating global expansion.

Haichen Energy Storage has set its sights on the Middle East. On August 17th, the company successfully won Saudi Electricity Company's (SEC) 1GW/4GWh battery energy storage system project.

Currently, pending litigation, enormous financial pressure, fierce competition from giants, uncertain overseas risks, and insufficient R&D investment make Haichen Energy Storage's IPO journey full of uncertainties.