Jiangsu Lopal Tech Co Ltd

Lopal Technology released its 2026 interim report, posting a net profit attributable to the parent of 421 million yuan in the first half, swinging from a loss of 85.15 million yuan in the same period last year. Revenue reached 7.2 billion yuan, up 98.7 percent year on year, while net profit attributable to the parent after deducting non-recurring items was 423 million yuan, compared with a loss of 132 million yuan a year earlier. In the second quarter, revenue was 3.7 billion yuan, up 82.4 percent year on year, and net profit attributable to the parent was 206 million yuan, versus a loss of 59.2 million yuan in the prior-year period. As of the end of the second quarter, total assets stood at 26.784 billion yuan, up 43.5 percent from the end of last year, and net assets attributable to the parent were 5.181 billion yuan, up 83.2 percent. The company focuses on lithium iron phosphate cathode materials and environmentally friendly fine chemicals for vehicles. During the reporting period, cathode material shipments reached 3.32 million tonnes, up 59 percent year on year, benefiting from national policy support and the development of the new energy vehicle market.

Lopal Technology plans to use 1.4 billion yuan raised from its 2025 A-share private placement to increase capital in its controlling subsidiary Changzhou Lithium Source. At the same time, all interest and wealth-management income generated in the special fundraising account during the period will be provided to Changzhou Lithium Source as interest-bearing loans. Changzhou Lithium Source will then use the funds it receives to increase capital in its wholly owned subsidiaries Shandong Lithium Source and Hubei Lithium Source by 800 million yuan and 600 million yuan respectively, and will also provide them with interest-free loans. The funds will be used to implement the project for 110,000 tonnes of high-performance phosphate-based cathode materials and the project for 85,000 tonnes of high-performance phosphate-based cathode materials. In the first quarter of 2026, Lopal Technology achieved revenue of 3.497 billion yuan and net profit attributable to the parent company of 214 million yuan.

Lopal Technology has signed a continuing connected transaction agreement with LG Energy Solution, Ltd. Since LG Energy Solution holds a 20% stake in the company's third-tier subsidiary, Lopal Indonesia, it is regarded as a connected person under the Hong Kong Listing Rules. To regulate transactions between the two parties, the company has entered into separate continuing connected transaction agreements with LG Energy Solution for procurement and sales, and has set annual caps for the transaction amounts from 2026 to 2028. These transactions do not constitute connected transactions under the rules of the Shanghai Stock Exchange.

The lithium iron phosphate industry is preparing a collective price increase. At a closed-door meeting led by an industry association last week, raising prices was the main topic, and participating companies generally expressed a willingness to do so. A person in charge at Lopal Technology said the initial expected increase is between one thousand and two thousand yuan per tonne. Hunan Yuneng has already taken the lead by issuing a price adjustment notice, deciding to raise prices for all lithium iron phosphate products by two thousand yuan per tonne starting August 1. This round of price hikes is mainly driven by rising raw material costs such as ferrous sulfate and phosphoric acid, and the current pricing mechanism linked to lithium carbonate can no longer cover the actual cost increases. As of press time, downstream power battery manufacturers have not yet explicitly agreed to accept the price increases, and factors such as expectations of consumption tax levies have added difficulty to price negotiations. As the core cathode material for power batteries, every one thousand yuan per tonne increase in lithium iron phosphate raises battery unit costs by about eight hundred yuan per tonne. For a mainstream family car equipped with a sixty kilowatt-hour battery, the battery cost would increase by about six thousand to seven thousand two hundred yuan. Against the backdrop of vehicle manufacturing profit margins of only one point five percent, upstream price hikes will pose severe challenges to vehicle profit margins.