Changhong Energy plans to raise no more than 903 million yuan to expand overseas production capacity

News report (Reporter Shu Yajang): On April 3, Sichuan Changhong New Energy Technology Co., Ltd. (hereinafter referred to as “Changhong Energy”) disclosed its 2026 stock issuance prospectus for specific targets (draft), planning to raise no more than 903 million yuan. Of this, 803 million yuan will be used for a high-rate lithium battery expansion project in Malaysia, injecting strong growth momentum. Another 100 million yuan will be used to supplement working capital and repay borrowings, which will optimize the balance sheet structure and improve its ability to withstand risks. This private placement has been considered to precisely align with the direction of “the package of new policies for NEEQ refinancing,” and it is not only a key move by Changhong Energy as it focuses on its main business and advances a globalized layout, but also provides a reference paradigm for small and midsize enterprises on the NEEQ to strengthen their main operations through the capital market.

At present, the global high-rate lithium battery industry’s business conditions continue to rise steadily. As core supporting components in fields such as power tools, clean tools, portable energy storage, and intelligent travel, high-rate lithium batteries enjoy strong market demand. Coupled with the explosive growth in emerging application areas such as drones, robots, and BBU, they have become an important growth point in the lithium battery industry’s sub-sectors. Meanwhile, the competitive landscape of the industry has undergone profound changes, with the focus of competition shifting to a contest of profitability and core technology. With the funding raised from this private placement, Changhong Energy will focus on the core high-rate lithium battery segment, aligning with the industry’s trend of high growth, laying the foundation for capturing market share and consolidating competitive advantages.

According to the announcement, among the funds proposed to be raised in this offering, 803 million yuan will be invested in the Malaysia expansion project for high-rate lithium battery cells. The construction period will be 1.5 years. After reaching full production, it will add a combined annual capacity of 170 million cells of 18650 and 21700 series, which is both a key step to address the current global mismatch between supply and demand for high-end lithium battery capacity and to resolve Changhong Energy’s own production capacity bottleneck, and also a strategic deployment that follows the industry’s globalized layout trend and hedges international trade risks.

At present, China has firmly established itself as a core power in the global lithium battery industry, and overseas markets have become a core incremental growth driver for domestic lithium battery companies. However, the industry also shows a pattern of excess production capacity in mid-to-low-end segments and a shortage of high-end capacity. In high-rate lithium batteries—core components in fields such as power tools—demand is strong, and core consumer markets are concentrated in Europe and the United States. Therefore, overseas expansion is an inevitable choice to avoid trade barriers and meet the requirements for localized production capacity by key overseas customers.

From Changhong Energy’s existing production capacity, it can no longer match the orders and demand that continue to grow. Public information shows that by the end of 2025, the company’s utilization rate of its high-rate lithium battery capacity had already exceeded 90%. If this overseas capacity expansion proceeds smoothly, it will effectively break through the capacity bottleneck and provide support for fulfilling orders from international core customers.

According to the company’s 2025 performance quick report, Changhong Energy recorded revenue growth of 22% year on year last year, and its net profit attributable to shareholders grew 26% year on year. Growth momentum is strong. With its overseas bases completed, it will further improve its “domestic + overseas” dual-base layout, helping the company capture more share in the global high-rate lithium battery sub-sectors and aligning with the industry development trend.

Analysts said that after this private placement is implemented, Changhong Energy is expected to further consolidate its leading advantages and risk-resilience capabilities in high-rate lithium battery sub-sectors. This move will also invigorate the NEEQ board segment, helping form a positive cycle of “policy empowerment—capital support—industrial upgrading,” injecting strong momentum into using the capital market to serve the real economy and to promote the development of new quality productive forces.