When Hithium’s A1 application for its Hong Kong Stock Exchange (HKEX) IPO lapsed after six months without regulatory approval, it set off alarm bells for all keen observers, investors and industry players. Although at first glance it might seem like a simple procedural setback, it actually reveals a greater deal about the company’s financial health, investor confidence, and Hithium’s overall readiness for public markets.
According to the official Hong Kong Stock Exchange (HKEX) progress reports, Hithium originally filed its application on March 25, 2025. Under Main Board rules, if a company fails to address critical regulatory comments, complete necessary due diligence, or sustain sufficient market interest within six months, the application becomes inactive. HKEX even removes the draft prospectus from public view, disabling access to the previously published Application Proof on its website.
This lapse means that the company now faces a difficult choice: either abandon its IPO plans entirely or start from scratch with a fresh application, incurring all associated costs, scrutiny, and delays once again.
It is important to note that HKEX A1 applications don’t just lapse without reason, and for investors and market watchers this raises fundamental questions about whether Hithium’s management team and sponsors possess the organizational capability and financial discipline to navigate the complexities of IPO preparations, let alone manage daily business operations effectively.
Beyond the embarrassment, it’s a clear signal that the situation at Hithium is dire. Many observers describing the combination of events Hithium is going through as the perfect storm of fundamental red flags. The company’s cash flow has historically been subsidy-driven by the CCP, raising doubts about profitability without significant government support and questions of national security for potential state clients. The subsidies by the CCP have been key to driving Hithium’s growth, allowing it to expand quickly without maintaining a profitability margin. Adding to Hithium’s storm is the fact that their largest overseas client in the U.S., Powin, recently went bankrupt, directly affecting Hithium’s future revenue projections. It is expected that the Powin bankruptcy wiped out $215 million in orders from Hithium. On top of all this, Hithium is currently dealing with both legal and regulatory complications, and combined, all these factors might help explain Hithium’s listing failure.
Hithium is not alone in facing such setbacks. For example, other companies like Jinsheng New Energy, a battery recycling firm, pursued IPO listings in both Mainland China and Hong Kong, with earlier attempts being withdrawn or lapsed amid financial difficulties. Market observers were wary of Jinsheng’s rising losses, rising debt, and urgent capital need, with investors increasingly questioning the competence of the company. It is hard not to see parallels between Jinsheng and Hithium.
If Hithium does decide to refile again, it will face an even greater challenge. A follow-up submission would likely prompt a more thorough examination by the Securities and Futures Commission and HKEX, with regulators reexamining previous shortcomings with heightened scrutiny. They may require additional disclosures or impose more stringent conditions. Hithium was relying on the $500m USD expected to be raised by the IPO; with that off the table for the foreseeable future, it’s questionable if Hithium possesses the time and funds to endure such a comprehensive ordeal, as its current burn rate ticks away at the little remaining cash capital. It would not be surprising to see the CCP step in once again.