Qingshan Lithium Battery Company achieves its first profit in nine years since its establishment

Interface News reporter | Gao Jing

Qingshan lithium battery company Ruichun Lanjun (00666.HK) has finally turned a profit.

On the evening of March 26, Ruichun Lanjun released its financial report showing that last year it achieved revenue of RMB 24.334 billion, a year-on-year increase of 36.7%; net profit was RMB 622.3 million, turning a loss into a profit year over year. In 2024, the company recorded a net loss of RMB 1.163 billion. This is Ruichun Lanjun’s first time being profitable since its establishment.

Ruichun Lanjun was founded in 2017. It is Qingshan Group’s core asset in the new energy sector. Its core businesses include two segments: traction batteries and energy storage batteries. For the former, last year revenue accounted for approximately 41.1%, while the latter contributed 55.7% of Ruichun Lanjun’s revenue.

Qingshan Holding Group is the world’s largest stainless steel manufacturer and metal nickel producer, and it has abundant upstream resources along the battery industry chain worldwide, including nickel, cobalt, manganese, lithium, and graphite. Qingshan Group’s founder Xiang Guangda is known as the “World Nickel King,” and he is also Ruichun Lanjun’s actual controller.

At present, in the energy storage battery business segment, Ruichun Lanjun’s main布局 covers two areas: residential energy storage and large-scale energy storage. In terms of the traction power market business, it focuses on the commercial vehicle track.

According to statistics from Shanghai Metals Market, in 2025 Ruichun Lanjun ranked fifth globally in shipments of energy storage cells, and it ranked first globally in shipments of residential energy storage cells. In addition, according to statistics from the China Automotive Power Battery Industry Innovation Alliance, last year Ruichun Lanjun’s traction power batteries for new-energy commercial vehicles ranked sixth domestically by vehicle-loading volume.

While both revenue and net profit turned positive at the same time, Ruichun Lanjun also repaired the low gross margin that industry insiders have criticized for a long time.

Image source: Ruichun Lanjun

According to the financial report, last year Ruichun Lanjun’s overall gross margin increased to 11.2%. Among them, the gross margin of traction battery products reached 11.9%, up nearly 10 percentage points from the previous year; the gross margin of energy storage batteries was 10.8%, up 5.4 percentage points year over year.

Since listing, Ruichun Lanjun’s gross margin has never reached double digits; in 2024 it was only 4.1%.

But compared with peers, there is still a gap. Among other peers listed in Hong Kong, Innovusion (03931.HK) and Guoxin New Energy (03677.HK) had gross margins of 15.9% and 14.6% respectively in 2024.

If measured against the industry leader CATL (300750.SZ/03750.HK), the gap is even bigger. CATL’s gross margin last year was 26.27%. Among them, traction battery gross margin was approximately 23.84%, and energy storage battery gross margin was approximately 26.71%. Whether looking at the overall picture or at individual segments, Ruichun Lanjun’s gross margin last year was still less than half of CATL’s.

Due to entering the market relatively late, to compete for market share in its early days, Ruichun Lanjun once implemented a strategy of “winning volume through price,” compressing profit margins proactively to gain market share with low-priced products. While this strategy can bring short-term share gains, it erodes the company’s profitability.

In a recent interview, relevant executives from Ruichun Lanjun told Interface News that the company has shifted to an operating path of “resolutely not chasing low prices.” “A company that runs any product business must follow business logic. Otherwise, if you jump into a vicious price competition, all you can do is pursue short-term goals.”

According to their account, in the second half of 2025, supported by relevant policies, demand in Australia and Europe’s residential storage markets showed explosive growth. At one point, for some of Ruichun Lanjun’s products, supply even fell short of demand, and some customers reportedly proactively raised prices to lock in capacity.

For some projects in China with longer account receivable cycles and thinner profit margins, the company chose to proactively avoid them. The executive said, “Our strategy in the energy storage sector is currently to focus on overseas markets.”

They also disclosed that in 2025, Ruichun Lanjun’s energy storage business orders tilted toward overseas high-margin markets led by Europe, the U.S., and Australia, and it will continue to increase its share going forward.

Regarding the notable growth in the 2025 gross margin, Ruichun Lanjun stated in its financial report that the reasons include a substantial increase in order volumes for traction and energy storage battery products, the emergence of scale effects, and cost reductions and efficiency improvements.

Last year, Ruichun Lanjun sold 82.7 GWh of lithium battery products, up 89.2% year over year. Among them, revenue from traction battery products was RMB 10.013 billion, up 35.6% year over year; revenue from energy storage battery products was RMB 13.561 billion, up 86.8% year over year.

From the industry backdrop, Ruichun Lanjun’s order growth is not an isolated case.

In 2025, in the global lithium battery market—especially the energy storage battery market—overall demand grew beyond expectations.

Data from the Korean research institution SNE Research (hereafter referred to as SNE) shows that last year global traction battery vehicle-loading volume reached 1187 GWh, up 31.7% year over year. The growth rate slowed somewhat compared with earlier years, but it still maintained a relatively stable upward trend.

The energy storage battery industry grew even faster. According to SNE data, in 2025 the total global shipments of energy storage batteries reached 550 GWh, up 79% year over year. This was mainly promoted by factors such as the rapid increase in installed capacity of renewable energy and policy support across different regions.

However, policy tailwinds also come with uncertainty. Taking Europe as an example, in some countries residential storage subsidy policies are being phased out, which may affect the timing of demand. Uncertainty also exists in the U.S. market regarding trade policies.

The aforementioned executive pointed out that Ruichun Lanjun’s total production capacity is not large by industry standards. In 2025, the company’s annual cell production capacity was about 90 GWh. According to its plan, the company will expand capacity in 2026, with the expansion scale possibly exceeding 20%.

After expanding capacity, Ruichun Lanjun’s capacity scale will still not be considered large in the industry, which provides the company with substantial strategic flexibility. At the same time, it also believes that scale effects and long-term stable relationships with strategic suppliers give Ruichun Lanjun a certain cost advantage. Moreover, as internal operations become increasingly integrated over time, issues such as dispersed resources and redundant investment are improving, further lowering costs.

In terms of market competition strategy, “Ruichun Lanjun no longer needs to use low prices to obtain market share.” The aforementioned executive said.

In addition, in terms of product structure, Ruichun Lanjun has strengthened its production capacity for traction battery packs (packs) and energy storage systems. It has gradually shifted from being only a cell supplier to becoming a provider of traction battery full packs and energy storage systems.

Compared with cells, traction battery packs and energy storage systems have higher selling prices and gross margins.

Ruichun Lanjun’s data shows that in 2025, the company’s traction battery packs and large-scale storage system annual production capacities both achieved significant growth, and according to the executive, this kind of setup will continue to be implemented in the future.

Overall, Ruichun Lanjun’s first-time profitability was achieved under the dual effect of the global lithium battery market growing beyond expectations and the company’s own adjustments. Whether the company can continue to deliver on its profitability goals amid industry fluctuations still remains to be further observed.

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责任编辑：宋雅芳