Senior Material Passes HKEX Hearing: World's No.2 Separator Maker Sees Profits Plunge 76% in Three Years
N.R. Finch
Senior Material (星源材质, 300568.SZ), the world's second-largest lithium-battery separator maker, has cleared its HKEX listing hearing with 11.6% global market share; yet net profit shrank over 70% in three years, making the IPO pricing a test of confidence in its earnings recovery.
What does clearing the hearing mean?
Senior Material has passed the HKEX main-board listing hearing. China Securities International is the sole sponsor.
This means → the A-share-listed company has entered the final sprint of its Hong Kong IPO — only pricing and the public offering remain.
The company was founded in 2003 and was the first in mainland China to master dry-process uniaxial-stretching technology for lithium-battery separators.
How secure is the global No. 2 position?
Per Frost & Sullivan, Senior Material has ranked second globally in lithium-battery separator shipments for six consecutive years, holding 11.6% global market share in 2025, up from 11.0% in 2020.
Its mainland China share is about 13.5%, also second.
In plain terms = six years locked in at global No. 2, share rising but slowly — the market is expanding, and rivals are scaling too.
Dry-process vs. wet-process — where is the edge sharper?
Separators — thin films inside lithium batteries that keep the positive and negative electrodes apart to prevent short circuits — are made via two main routes: dry-process and wet-process.
In 2025, Senior Material held roughly 21.5% of the global dry-process separator market, ranking first; its wet-process share was 9.0%, ranking fourth.
This reflects a core competitive edge concentrated in dry-process. The company is also among the first in mainland China to operate all three production technologies: dry, wet, and coated.
What does the client roster signal?
The prospectus lists global top-tier battery makers: LG Energy Solution, Samsung SDI, SK On, Murata, and SAFT on the international side.
Domestically: CATL, BYD, Gotion High-tech, CALB, EVE Energy, and Sunwoda.
This means → the client mix mirrors the industry's power structure, validating supply-chain standing — but it also means pricing power may not rest with the separator maker.
Revenue is growing — so why did profit collapse?
Revenue for 2023–2025 came in at RMB 2.98 bn, 3.51 bn, and 4.08 bn, a 16.9% CAGR.
Net profit over the same period fell from RMB 594 m to just 143 m — a decline of more than 70% in three years.
In plain terms = selling more, earning less. Mainland separator shipments surged from 7.6 bn sqm to roughly 34.6 bn sqm in four years (46.1% CAGR), and the resulting price war is devouring margins.
What is the key question for the Hong Kong valuation?
Revenue growth alongside profit decline points to overcapacity pressure across the separator industry.
This means → whether the IPO can price fairly hinges largely on investors' view of the earnings-recovery path — when the price war bottoms out and how long capacity takes to clear.
Put simply = technology standing and the client list are the "hole cards," but the profit trend is the "face card" — the gap between the two is the pricing puzzle of this IPO.
Content is for reference only, not financial advice.