"Financial health" is no longer an optional consideration for corporate decision-makers, but rather a fundamental prerequisite and core capability for navigating industry cycles. Particularly as the industry transitions from rapid expansion to intense competition, companies' financial stability and risk resilience have become among the most important indicators of their core competitiveness.

To provide readers with an intuitive understanding of the financial health status of China's lithium battery industry chain, we conducted an in-depth analysis of core financial data including debt capacity, financial leverage, and cash flow for 14 key industry players: Contemporary Amperex Technology Co., Limited (300750.SZ), Byd Company Limited (002594.SZ), Eve Energy Co.,Ltd. (300014.SZ), CALB (03931.HK), Gotion High-Tech Co.,Ltd. (002074.SZ), REPT BATTERO (00666.HK), Sunwoda Electronic Co.,Ltd. (300207.SZ), Ganfeng Lithium Group Co.,Ltd. (002460.SZ), Guangzhou Great Power Energy And Technology Co.,Ltd. (300438.SZ), Zhejiang Narada Power Source Co.,Ltd. (300068.SZ), Do-Fluoride New Materials Co.,Ltd. (002407.SZ), ZENERGY (03677), and Haichen Energy Storage (planned IPO).

Overall, during the capacity expansion wave of recent years, sample companies' leverage levels have been pushed to high positions. However, high leverage has not brought solid financial foundations, and risks are accumulating.

The 14 companies' average asset-liability ratio has approached 68%, with Zhejiang Narada Power Source Co.,Ltd. breaking through the 80% warning line, while even the lowest, Do-Fluoride New Materials Co.,Ltd., reached 56.69%.

More severe is the debt servicing capacity, with an average quick ratio of only 0.84, falling below the 1.0 safety line. In fact, as many as 10 companies in the sample have quick ratios below 1, indicating that short-term liquidity risk has become a widespread phenomenon.

The industry's "internal cash generation capacity" is showing serious Matthew effects and polarization. Specifically, the leading duopoly - Contemporary Amperex Technology Co., Limited and Byd Company Limited - together contributed over 90 billion yuan in operating cash flow, demonstrating strong financial resilience. In contrast, the remaining 12 companies in the sector generated only 5.835 billion yuan in total operating cash flow, operating on almost different scales entirely.

Considering the fundamental changes in current industry development and competitive landscape, it can be predicted that under the backdrop of overcapacity and intensifying price competition, whoever can maintain a healthy balance sheet and ample operating cash flow will be more likely to survive the industry shakeout and gain historic opportunities to reshape the industry landscape.

**01 Risk Differentiation: Four Categories of Companies Show Increasing Divergence**

Based on financial stability and risk exposure levels, the 14 sample companies clearly present four characteristic categories. Behind this lies a vivid picture ranging from "steady progress" to "precarious situations," reflecting differences in internal financial and operational capabilities.

**(1) Financially Robust Companies (Representatives: Contemporary Amperex Technology Co., Limited, Byd Company Limited, Do-Fluoride New Materials Co.,Ltd.)**

**Contemporary Amperex Technology Co., Limited: Absolute Control, Cash is King**

Companies in this tier are the industry's backbone, with their greatest commonality being extremely strong "internal cash generation" capabilities - operating cash flows far exceeding profits, constructing solid financial moats. Whether Contemporary Amperex Technology Co., Limited's "interest-free" leverage formed through industry chain positioning, Byd Company Limited's "cash cow" model driven by extreme operational efficiency, or Do-Fluoride New Materials Co.,Ltd.'s textbook-level prudent financial strategy, the essence is successfully transforming operational advantages into financial strength to weather cycles. They not only fear no industry shakeout but even hold the initiative to rewrite the competitive landscape.

Contemporary Amperex Technology Co., Limited holds 350.6 billion yuan in monetary funds, a figure that symbolizes not only its own scale but also reflects industry status - it even exceeds the combined monetary funds of the other 13 companies on the list. Its 62.59% asset-liability ratio appears high but mainly consists of interest-free operating liabilities formed by upstream and downstream accounts payable, reflecting its core industry chain position and strong bargaining power. Its true strength lies in "cash generation" function: net operating cash flow reaches 58.687 billion yuan, nearly twice its net profit attributable to shareholders (30.485 billion yuan), indicating extremely high profit quality with every yuan of earnings accompanied by abundant cash return. A current ratio of 1.69 and quick ratio of 1.44 together construct an impregnable financial defense, elevating its financial condition beyond "robust" to "absolute control."

**Byd Company Limited: High-Leverage High-Efficiency Operating Art**

Byd Company Limited provides a completely different model. Its 71.08% asset-liability ratio is relatively high, yet its risk profile remains extremely healthy. Most intriguingly, its current ratio (0.76) and quick ratio (0.47) are far below the safety line of 1, which would be danger signals in traditional financial analysis, but for Byd Company Limited, this precisely demonstrates its extremely efficient operational capabilities and capital turnover efficiency. Supporting this model is confidence from its massive cash reserves of 111.7 billion yuan and substantial operating net cash flow of 31.833 billion yuan - also more than twice its net profit (15.511 billion yuan). This proves its vast business system is a powerful "cash cow" that can continuously provide fuel for this high-speed operating machine.

**Do-Fluoride New Materials Co.,Ltd.: Small but Beautiful Stability Model**

As a materials sector representative, Do-Fluoride New Materials Co.,Ltd. demonstrates textbook-level financial prudence. Its asset-liability ratio of only 56.69% is the lowest among the 14 companies, showing conservative leverage strategy. Although its net profit (0.51 billion yuan) and operating cash flow (0.26 billion yuan) are modest in scale, the critical signal of positive cash flow indicates its main business has stabilized at the industry cycle bottom and recovered self-generating capability. Its true highlight lies in strong short-term debt servicing capacity: current ratio of 1.46 and quick ratio of 1.30 rank among the top of all companies. This indicates the company has extremely high safety margins and can respond calmly even during severe market volatility, typifying "having reserves brings peace of mind" steady players.

**(2) Robust Expansion Companies (Representatives: Eve Energy Co.,Ltd., ZENERGY)**

Companies in this camp are striving to balance aggressive expansion with financial risk control. Their common characteristic is that while expansion has pushed up leverage, they have begun actively managing financial risks through optimizing debt structure or introducing equity capital, with positive improvement signals emerging operationally. Whether Eve Energy Co.,Ltd.'s significant operating cash flow improvement or ZENERGY's successful "deleveraging" through equity financing, both indicate they are transitioning from purely pursuing scale to focusing more on operational quality and financial health for sustainable development.

**Eve Energy Co.,Ltd.: Balancing Heavy Asset Expansion with Cash Flow Recovery**

Eve Energy Co.,Ltd.'s asset-liability ratio rose slightly to 62.57%, reflecting aggressive capacity investment. However, its debt structure remains relatively healthy, with interest-bearing debt mainly consisting of 20.27 billion yuan in long-term borrowings matched with long-term asset investments, avoiding "short-term debt for long-term investment" liquidity mismatch risks. The "decisive factor" in its financial improvement lies in operating cash flow - surging from 0.312 billion yuan in the same period last year to 2.373 billion yuan, indicating new capacity is gradually converting to effective cash collections, reducing dependence on external financing.

**ZENERGY: Capital's Salvation and Operational Self-Redemption**

ZENERGY provides an example of improving financial conditions through capital operations. Leveraging equity financing, its asset-liability ratio substantially decreased from a high of 76.34% to 59.19% over two and a half years, showing significant deleveraging success. Although short-term debt pressure persists - its 2.652 billion yuan cash can only cover approximately 41% of 6.459 billion yuan short-term liabilities, and quick ratio (0.88) remains below 1, its overall financial risk has been effectively controlled, entering a more benign development trajectory.

**(3) High-Leverage Expansion Companies (Representatives: CALB, Gotion High-Tech Co.,Ltd., REPT BATTERO, Sunwoda Electronic Co.,Ltd., Ganfeng Lithium Group Co.,Ltd.)**

These companies are the most aggressive participants in this round of capacity competition, with financial statements typically reflecting "scale-first" strategy risks. Their common predicament is that massive investments supported by high debt have not yet converted to stable, sufficient operating cash flow, creating dual pressure from high leverage and weak "cash generation" capabilities. Whether short-term debt indicators falling below warning lines or continued "bleeding" from operating activities, both mean their financial safety cushions are extremely thin, making them vulnerable to liquidity difficulties during market headwinds, with financial alarms already sounding.

**CALB: Scale's Feast and Liquidity's Tightrope**

CALB holds 8.298 billion yuan in cash yet must handle 50.013 billion yuan in short-term liabilities, with cash coverage of only 16.6%, meaning on-hand cash cannot even cover 20% of short-term debt.

**Gotion High-Tech Co.,Ltd.: Both High Debt and Liquidity Indicators Under Pressure**

Gotion High-Tech Co.,Ltd.'s asset-liability ratio reaches 72.22%, with current ratio (0.88) and quick ratio (0.71) both falling below the safety line of 1, indicating that even liquidating all current assets (including inventory) cannot repay short-term debt, highlighting prominent short-term liquidity risk.

**Sunwoda Electronic Co.,Ltd., REPT BATTERO: "Cash Generation" Insufficient for "Cash Burning" - Different Paths to Similar Cash Flow Predicaments**

The root problem for Sunwoda Electronic Co.,Ltd. and REPT BATTERO lies in "cash generation" function deficiency. Sunwoda Electronic Co.,Ltd., due to major investment in power battery business, saw asset-liability ratio rise to 65.46%, but its operating cash flow remains consistently negative, with quick ratio dropping to 0.88, showing its main business continues consuming cash. After listing, REPT BATTERO's monetary funds "halved" from 8.371 billion yuan to 4.212 billion yuan within a year, clearly reflecting massive cash consumption from "cash-burning" expansion and operating losses.

**Ganfeng Lithium Group Co.,Ltd.: Cycle's Prisoner and Depleted Cash Lifeline**

Upstream giant Ganfeng Lithium Group Co.,Ltd. warns of cyclical risks. Since late 2024, the company's operating cash flow plummeted 92% year-over-year, essentially drying up. This directly caused rapid financial deterioration: asset-liability ratio soared 12 percentage points within a year, with current ratio (0.75) and quick ratio (0.46) both at dangerous levels, trapped in typical "debt-funded losses" predicament.

**(4) High-Risk Stressed Companies (Representatives: Haichen Energy Storage, Guangzhou Great Power Energy And Technology Co.,Ltd., Zhejiang Narada Power Source Co.,Ltd.)**

Companies in this category have financial structures nearing imbalance with massive risk exposure. Their common characteristics include asset-liability ratios touching or breaking through dangerous thresholds, accompanied by serious operating losses or cash flow depletion, causing near-total loss of short-term debt servicing capacity. These companies' operations highly depend on external financing "blood transfusions," and once financing channels are blocked, they will directly face survival crises. They are no longer considering development but thinking about survival, walking on the edge of debt default.

**Zhejiang Narada Power Source Co.,Ltd.: Debt Iceberg and Fragile Net Asset Lifeboat**

Zhejiang Narada Power Source Co.,Ltd.'s asset-liability ratio has soared to the dangerous threshold of 80.04%, with net assets comprising less than 20% of total assets, creating extremely fragile financial foundations. Its 1.98 billion yuan monetary funds face 11.634 billion yuan short-term liabilities, with coverage of only 17.0%, creating astronomical debt gaps. Current ratio of 0.90 and quick ratio as low as 0.54 indicate complete loss of short-term debt servicing capacity, with liquidity crisis imminent.

**Guangzhou Great Power Energy And Technology Co.,Ltd.: Aggressive Expansion's Endgame and Financial Deceleration**

Guangzhou Great Power Energy And Technology Co.,Ltd. encountered industry price wars during aggressive expansion, falling into losses for the first time, causing asset-liability ratio to surge nearly 8 percentage points within a year to 72.46%. Its current ratio of 1.00 and quick ratio of 0.66 leave virtually no safety margin, with financial structure rapidly losing control under operational deterioration impact.

**Haichen Energy Storage: Precarious Leap from Financing Dependence to Self-Generation**

IPO candidate Haichen Energy Storage's explosive growth is built entirely on massive losses (1.975 billion yuan loss in 2023) and consistently negative operating cash flow (1.746 billion yuan net outflow in 2023). Its operations completely depend on external financing "blood transfusions," and once IPO progress is blocked or financing environment changes, it will immediately face survival crisis.

**02 "Cash Flow" is the Lifeline, Equity Financing Becomes Key "Blood Replenishment" Channel**

This analysis reveals a critically important industry phenomenon: at the current stage, the positive/negative status and scale of operating cash flow is the most reliable leading indicator for judging corporate debt risk, with importance even exceeding net profit.

During heavy asset, high-investment expansion periods, high depreciation and amortization may cause companies to show book losses, but as long as operating cash flow remains positive (like early Contemporary Amperex Technology Co., Limited), it proves main business has self-circulation capability, making such losses strategic. This can be called "quality losses." Conversely, if operating cash flow remains consistently negative, even with modest book profits, it indicates operational "bleeding" - profits may just be inventory sitting in warehouses or uncollectable accounts receivable. Such profits are "paper wealth," representing "profitless quality earnings" harboring enormous risks.

Precisely because of this, for highly leveraged companies, pursuing IPOs or conducting refinancing has become a key strategic measure for alleviating debt pressure, optimizing capital structure, and avoiding liquidity crises. This is "self-rescue" behavior using equity funds without principal and interest payment pressure to replace high-pressure debt funding. However, this itself is a double-edged sword, highlighting the industry's high dependence on capital markets. Once capital market conditions tighten and IPO channels narrow, these companies' financing "lifelines" will face severe tests.

**03 Conclusion**

Predictably, as industry competition enters deep waters, many companies already stand on survival's edge. Under current industry conditions, maintaining financial health is crucial. History has repeatedly proven that facing industry winters, financially healthy companies are more likely to weather cycles and become winners, while financially fragile companies will face severe tests, with possibilities of debt default or even bankruptcy not excluded.

In summary, although scale expansion remains one of the industry's main themes, companies' operational focus must shift from purely pursuing scale to pursuing quality, cash-flow-generating healthy growth. Companies must first consider survival, then market influence expansion. For investors, it's necessary to penetrate scale's fog and focus on the "cash flow lifeline" that determines corporate life and death.