{"text":[[{"start":9.8,"text":"One thing that stands out about Guangzhou Tinci Materials Technology Co. Ltd. is the ages of its top managers. The average of the top three executives at the lithium battery materials maker is nearly 60 years old – something you don’t see too often at Chinese tech companies in emerging areas. That depth of experience is probably a factor helping Tinci to stay at the head of the pack of companies producing electrolytes used in lithium batteries that power not only portable devices like smartphones, but also many of the world’s new energy vehicles (NEVs)."}],[{"start":46.89,"text":"But the track record for Tinci, which last week filed to list its shares in Hong Kong, also reflects the pain the NEV industry, including makers of batteries and their components, has felt over the last two years. The emergence of new technologies like sodium ion batteries is also providing a challenge for the company as it plays in a field where products are constantly changing."}],[{"start":72.28,"text":"Tinci isn’t sitting idly by while all that is happening, and is developing products for emerging new areas. Still, the rapid pace of change shows that it could easily be overtaken by other companies that develop better products, especially in the current climate where Western governments are trying to seize back some of the momentum from Chinese companies that have come to dominate the new energy sector."}],[{"start":97.28,"text":"All that said, Tinci looks pretty well positioned, at least for now. Unlike many others in the new energy sector, the company has managed to remain comfortably profitable over the last three years, though its profit fell sharply in 2024 at the height of a price war caused by oversupply. It began to recover last year, with its profits bouncing back."}],[{"start":121.97,"text":"The company is also trying to build up businesses in new areas, including manufacturing of chemicals used in daily products like shampoo and laundry detergent. But those businesses remain small, at least for now, and capacity utilization rates at related manufacturing facilities remain quite low – around 40% – as the company ramps up production of those products and looks for new customers."}],[{"start":149.95,"text":"Tinci is quite the industry veteran in many ways. It was founded back in 2000 by Xu Jinfu, now 61 and from a first generation of Chinese entrepreneurs after the implementation of market reforms that allowed private companies starting in the 1980s. Xu’s second in command is Xu Sanshan, apparently unrelated, who, at 57, is also from that early generation of entrepreneurs and has been at the company since 2010. Finally there’s Gu Bin, 60, who has been the company’s CFO since 2007 – something you rarely see in many tech companies where the top financial person frequently changes."}],[{"start":192.63,"text":"The company is the world’s top maker of electrolyte material used in lithium-ion batteries with 35.7% of the market, ahead of electric vehicle (EV) giant BYD with 15.6% of the market. Number three is Shenzhen Capchem (300037.SZ), which has 13.8% of the market and in January also applied to list in Hong Kong to complement its current Shenzhen listing."}],[{"start":225.23,"text":"Big fundraising"}],[{"start":227.26999999999998,"text":"This particular IPO looks like it should be relatively large, almost certain to raise more than $1 billion. The first big hints come from its list of underwriters, which include global giant JPMorgan and Chinese leader Citic Securities, indicating the share sale is likely to attract big institutional investors from both China and globally."}],[{"start":250.64999999999998,"text":"Shenzhen Capchem is probably the best peer for comparison purposes, as it also engages mostly in making battery materials. Capchem’s Shenzhen-listed shares currently trade at a price-to-sales (P/S) ratio of about 5, and a similar ratio would value Tinci at about 83 billion yuan ($12 billion), based on its 2025 sales. But we suspect Tinci could get a premium over Capchem due to its market-leading position, meaning it could get valued at around 116 billion yuan if it can command a P/S ratio of around 7."}],[{"start":290.88,"text":"Next, we’ll take a closer look at Tinci’s financials, which show the big hit it took in 2024 and some of the steps it’s taking to try to diversify beyond selling lithium battery electrolyte materials to Chinese customers."}],[{"start":307.62,"text":"The company’s revenue fell 19% in 2024 to 12.5 billion yuan, as its average selling price for lithium battery electrolyte tumbled 45% that year from 2023 levels. Average electrolyte prices continued to fall another 5.6% last year, though increases in some other areas helped the company record an increase of 4.3% in average selling price for its overall lithium ion battery materials that year."}],[{"start":340.51,"text":"As prices stabilized, Tinci returned to revenue growth, as the figure rose 33% to 16.6 billion yuan last year. The big majority of its revenue, 96.2%, came from customers in China last year. Tinci is aiming to expand its geographical footprint beyond its home market, and last year signed separate agreements to set up two new production bases, one in Morocco working with the government, and the other in the U.S. working with a local joint venture partner."}],[{"start":375.31,"text":"The company says it is also trying to ramp up its daily chemicals business, though that segment has remained at a relatively low level of around 8% of its revenue over the last three years and capacity utilization is low. Tinci also recognizes that leading battery makers like CATL are looking at alternative technologies like sodium-ion batteries, and is taking steps to develop related electrolyte products. It said it began producing sodium-ion battery electrolyte in 2024, and its products in that area have been certified by several leading battery makers."}],[{"start":416.19,"text":"One slightly worrisome area for Tinci is its inventory, which has been steadily trending upward in the last year. The level rose 19% to 1.62 billion yuan by the end of last year, and then suddenly spiked another 36% in the first two months of 2026 to reach 2.21 billion yuan by the end of February. But the buildup appears related to growing demand, rather than lack of it, reflected by the fact that the company’s average inventory days have been trending steadily downward over the last three years."}],[{"start":454.28,"text":"On its bottom line, Tinci’s profit fell by more than two-thirds in 2024 to 478 million yuan as electrolyte prices plunged. But it bounced back to 1.34 billion yuan last year as prices stabilized."}],[{"start":471.67999999999995,"text":"Overall, things look relatively positive for the company’s IPO. Its market-leading position and early steps to diversify geographically and into new emerging areas like sodium-ion batteries should help it command a valuation premium over its peers. At the same time, its stabilizing business should ease investor concerns about future price pressures."}],[{"start":506.6099999999999,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1774944768_8991.mp3"}