Shenzhen Yichu Digital Energy backed by China's Ganfeng Lithium (1772) – the world's largest producer of lithium, a crucial raw material in battery production – launched its Hong Kong unit on Friday, eyeing a Hong Kong initial public offering next year.
As an arm of energy storage developer and operator Shenzhen Yichu Digital Energy founded in 2024, it will focus on overseas business and cross-border energy asset investment and financing to expand into Belt and Road countries and emerging markets globally, speeding up the export of China's energy storage technology, hardware and solutions.
The company has advanced multiple large-scale grid-side storage projects across the Chinese mainland, with 32 signed deals and a total development pipeline of 32 gigawatt-hour (GWh) to capitalize on the global energy storage boom stemming from the growing integration of renewable energy into power grids and surging demand from data centers.
The Hong Kong unit is in talks with a number of prospective partners across Southeast Asia and the Middle East over battery energy storage system (BESS) supply and overseas power station investment and development, said Shi Jiao, chair and general manager of Yichu Digital Energy.
It targets a long-term order split of 70 percent from the mainland and 30 percent from overseas markets including mainly Southeast Asia, the Middle East and Europe, said Feng Zhuoluo, vice president of the company.
With fierce competition and rapid industry advancement, the company intends to secure more international investment before scaling up R&D to incubate light-asset projects like AI, robotics and energy storage system controls on the mainland when it was ready for an A-share IPO, Feng said, adding that they are also preparing to go public in the mainland.
Shenzhen Yichu Digital Energy, which used to be a subsidiary of Ganfeng Lithium, selected Hong Kong for its status as a financial and transport hub, with its green finance system, said Li Liangbin, chairman and founder of Ganfeng Lithium.
In late March, Ganfeng Lithium said it was envisioning "explosive growth" in the global BESS market in 2026, spurred by higher prices for the metal and buoyant demand for renewable energy infrastructure, which came after it posted a net profit of 1.61 billion yuan (HK$1.89 billion) for 2025, swinging from a net loss of 2.1 billion yuan a year earlier.
Meanwhile, Contemporary Amperex Technology (CATL) (3750) holds such a large market share and market dominance that it is normal for the leading firm to encounter competition. As the wider energy storage sector is seeing "de-CATLization" — battery buyers' push to diversify supply and reduce reliance on CATL— Ganfeng Lithium occupies a dual position: it competes with CATL as a battery maker, yet also supplies battery-grade lithium salts to the firm.
"Beyond Ganfeng Lithium, we also source battery cells from CATL," Feng said, "As we are preparing for a public listing, we need to reduce related-party transactions."
Although CATL's cell capacity is tight, the three parties' upstream-downstream supply chain linkages give Yichu Digital Energy an edge on allocation and pricing when buying from CATL, according to Feng. Ganfeng Lithium was Yichu Digital Energy's main supplier of batteries until 2026, Li said.
"Within the battery sector, CATL holds a strong position on the technology front, which is not easy to dislodge. While the industry hopes to mount a challenge, I remain skeptical about whether that goal can actually be achieved," Feng said.
He added lithium-ion battery manufacturing involves more than 600 process nodes end to end. Success does not hinge on a single technical breakthrough. Even so, the sector needs companies to make sustained long-term investments and refocus on fundamentals — including core electrochemical principles, raw materials, engineering quality and after-sales services — to build viable alternatives to CATL.
Frank Feng
