Xiamen Hithium’s latest A1 Application Proof, which it refiled with the Hong Kong Stock Exchange (HKEX) on October 27, 2025, comes less than a month after its previous A1 application expired in September. In it, Hithium claims that its new filing provides all relevant information about its operations, strategy, financial position, etc. Yet in reading the disclosure, it becomes apparent that Hithium is racing against time, hoping that this IPO attempt will buy it enough time to figure out a viable business plan, and that Hithium strategically omits key information and understates the significance of key regulatory developments in order to mislead potential investors.
Throughout the A1 filing, Hithium highlights its ambition in the global energy storage market and its aggressive expansions. But the amended filing not only exposes Hithium’s mounting financial strains but also that its business model is dangerously dependent on the Chinese government’s support to stay viable. For context, Hithium received RMB 334 million in subsidies in just the first six months of 2025 alone (Taken from Hithium’s A1 Filing p. 69), nearly matching the RMB 414 million granted throughout the whole of 2024. These subsidies dwarf the company’s RMB 152.1 million in pre‑tax profit for the same period (Taken from Hithium’s A1 Filing, p. 18, and p. 350). Strip away the CCP state support, and Hithium is making a significant annual loss, a fact the company avoids noting in its A1 filing. Without this flow of external capital, Hithium’s working capital and operational continuity would quickly come under threat.
This pressure on their working capital is clearly visible in other parts of the A1 filing. For starters, Hithium’s trade receivables turnover now sits at 227.9 days (Taken from Hithium’s A1 Filing, p. 56, and p. 343), up from 185.7 days in 2024. This means that Hithium, on average, waits over 6 months to get paid. Hithium claims this is due to “more diversified settlement terms” for overseas customers, but offers no explanation of how these terms are structured or how much risk they introduce. In 2024 alone, Hithium recognized more than RMB 532 million in expected credit loss, with RMB 513 million tied directly to trade receivables. For comparison, the company reported a net profit of only RMB 287.6 million in that year. That is a credit‑loss burden of over 185 percent of its annual profit.
To compensate for the worsening collection cycle, Hithium has been forced to delay its payments to suppliers. Trade and bills payable turnover have grown to 226.1 days (Taken from Hithium’s A1 Filing, p. 347), meaning the company is delaying payments to suppliers for nearly the same duration as long as it awaits payment from customers. In just the first six months of 2025, Hithium’s gross margin declined to 13.1 percent, down from 17.9 percent in FY2024 (Taken from Hithium’s A1 Filing, p. 314). ESS margins fell from 33.7 to 29.7 percent, and its overseas performance is even worse. In the United States, gross margin dropped from 43.0 percent to 36.5 percent. Across Europe, the Middle East, and Australia, Hithium’s margin collapsed from 34.2 percent to 18.1 percent.
At the same time, Hithium is intentionally silent on the fact that one of its largest overseas clients, Powin, recently went bankrupt. Erasing more than 200 million USD in expected orders. Nor does the A1 filing adequately address the fact that nearly half of Hithium’s revenue relies on five overseas clients who could be barred from working with CCP‑linked firms due to growing regulatory pressure and anti-China sentiment.
Regulatory exposure is also massively understated in the A1 listing. Under current U.S. rules, Chinese‑owned firms operating in Texas cannot acquire new real‑property interests after September 2025. Although Hithium already owns the land for its Texas plant, it does limit Hithium from being able to expand their assembly facility, or lease adjacent land. This eliminates the long‑term viability of the site that Hithium repeatedly promotes as part of its strategic plan.
Even more damaging, Hithium fails to disclose that it was named under Section 154 of the 2024 National Defense Authorization Act. The designation bars Hithium from contracting with the U.S. Department of Defense and makes its customers ineligible for federal tax reimbursements. This means U.S. competitors can offer pricing that is effectively 30% percent higher while remaining cheaper after credits. For a company claiming rapid U.S. expansion, this is a severe commercial handicap.
Taken together, the picture is unmistakable. Hithium’s operations are wholly dependent on CCP subsidies, strained by uncollected revenue, pressured by weakening margins, constrained by foreign‑market regulation, and undermined by customer‑concentration risk. The company has no buffer left. Without a successful IPO and the capital injection it hopes to secure, Hithium risks running out of liquidity.
This is why Hithium needs this IPO and has obscured these details in its A1 filing. Investors and regulators evaluating this filing should see the pattern clearly: rising liabilities, shrinking margins, deteriorating cash flow, and a disclosure strategy that obscures rather than clarifies. Hithium is not preparing for growth. It is buying time.
The question is: will the Hong Kong Stock Exchange allow Hithium to be listed with all these glaring omissions from its A1 filing which risks investors losing confidence in the HKEX’s ability to filter out unsuitable companies to go to IPO on its exchange. Or will it ensure there is a level of transparency and accuracy that is necessary by rejecting Hithium’s A1 filing and saving its international reputation while protecting investors. Only time will tell.
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