Hithium Energy Storage has once again submitted its IPO application to the Hong Kong Stock Exchange on October 27, marking its third attempt after withdrawing from an A-share listing plan in July 2023 and failing in its March application this year. The joint sponsors for this filing are Huatai International, CITIC Securities, ABC International, and BOCI.

The company has shown staggering revenue growth, with a compound annual growth rate of nearly 90% from 2022 to 2024. In 2024, it reported a turnaround in net profit attributable to shareholders. However, a closer look reveals that its core gross profit in 2024 came primarily from the U.S., heavily influenced by international trade policies. Moreover, the profit turnaround may largely depend on government subsidies, raising questions about the sustainability of its performance.

Additionally, Hithium's unresolved legal dispute with CATL could impact its IPO journey.

**Performance Tied to External Policies: High Growth Masks Financial Risks** Founded in December 2019, Hithium specializes in energy storage batteries and system solutions. According to its prospectus, it ranked third globally in lithium-ion energy storage battery shipments in 2024, with an 11% market share.

Revenue surged from RMB 3.615 billion in 2022 to RMB 12.917 billion in 2024, with a 225% YoY increase to RMB 6.971 billion in H1 2025. Net profit attributable to shareholders turned positive at RMB 259 million in 2024, further growing 136% YoY to RMB 212 million in H1 2025.

However, the company's performance appears heavily reliant on external policies. In 2024, U.S. tariff exemptions on solar and energy storage products boosted its U.S. revenue share to 26.2%, with a 43% gross margin (versus 8% domestically). By H1 2025, policy shifts slashed U.S. revenue to 11.8%, with margins dropping to 36.5%.

Despite reporting a net profit of RMB 259 million in 2024, Hithium received RMB 414 million in government subsidies. Excluding these, the company might still be in the red. Similarly, H1 2025 profits were supported by RMB 334 million in subsidies. The company acknowledges that policy incentives are critical but may be reduced or canceled.

**Mounting Financial Pressures** Trade receivables ballooned from RMB 5.197 billion in 2022 to RMB 9.661 billion in 2024, accounting for 28% of total assets by H1 2025. The receivables turnover period worsened from 11.8 days in 2022 to 227.9 days in H1 2025—equivalent to a 7.5-month payment delay.

Amid slowing collections, Hithium's debt ratio climbed from 66.48% in 2023 to 74.95% in H1 2025, reflecting heightened liquidity risks and leverage challenges.

**Legal Battle with CATL** The dispute stems from Hithium founder Wu Zuyu's tenure at CATL. After working at CATL for 7.5 years, Wu left in 2019 and founded Hithium, joined by former colleagues. Three of Hithium's four executive directors are ex-CATL engineers.

In September 2023, CATL sued Wu for breaching non-compete terms, resulting in a RMB 1 million settlement. Later, CATL accused another former employee of secretly working for Hithium. In June 2025, CATL filed a RMB 150 million lawsuit against Hithium and Wu, alleging unfair competition and poaching seven employees. The conflict escalated in July 2025 when CATL reported alleged trade secret violations to Xiamen police, leading to the detention of a Hithium executive.

In September 2025, CATL initiated seven patent lawsuits, demanding Hithium transfer ownership of nine patents and pay RMB 500,000 in fees. Hithium claims these patents are unused and pose no material risk to operations.

The outcome of these disputes could significantly influence Hithium's IPO prospects.