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Shares of Lopal Technology declined after the leading Chinese supplier of lithium-iron phosphate cathode materials announced a plan to invest CNY1.8 billion (approximately USD250 million) to boost its production capacity to meet rising demand from both domestic and international battery manufacturers.
The company closed at CNY14.60 (around USD2.03) per share today, reflecting a 3.5 percent decrease, while the broader Shanghai stock index increased slightly by 0.1 percent.
As one of the top three global providers of LFP cathode materials, the company intends to raise CNY2 billion through a private share offering. Of this, CNY1.4 billion will fund two capacity expansion projects, with the remaining funds allocated to working capital. The additional CNY400 million (approximately USD55.7 million) will be sourced from banks or internal reserves.
The planned expansions will increase production at facilities in Heze, Shandong Province, by 110,000 tons, and in Xiangyang, Hubei Province, by 85,000 tons, focusing on producing ultra-high energy density fourth-generation LFP cathodes. These new projects will also support manufacturing of other high-performance phosphate-based cathode materials.
Compared to ternary lithium batteries favored by many international electric vehicle manufacturers, LFP batteries are more cost-effective, safer, and environmentally friendly.
Over the past year, the company secured orders for its LFP cathode materials from leading domestic and global battery companies, including Contemporary Amperex Technology, LG Energy Solution, and BlueOval. Its Indonesian factory began mass shipments earlier this year.
Production of LFP cathode materials reached 184,700 tons last year, a 56 percent increase from the previous year, with sales climbing 65 percent to 178,300 tons. Revenue from this segment exceeded CNY5.7 billion, making up 75 percent of total income.
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