From huge losses to profits, Enjie Shares: How far can the "V-shaped reversal" go?

Source: China’s Market Value Insights (市值风云)

A pivotal battle in 2026.

Author | beyond

Editor | Xiao Bai

Have you ever paid attention to a sub-sector within the new energy industry chain—a lithium battery separator? It’s like a battery’s “separation wall.” It needs to block internal short circuits between the positive and negative electrodes, while also allowing lithium ions to pass through smoothly; it’s far from low-tech.

And in this space, China has a global leader—Enjie Co., Ltd. (002812.SZ, the company).

The company hasn’t had an easy time in the past two years. In 2024, the industry price war drove prices to “below-cost” levels, and even leading players posted losses. But in the second half of 2025, the story suddenly reversed: supply and demand tightened, prices rose, the industry started to catch its breath, and Enjie’s performance also turned from loss to profit in 2025.

Today, let’s talk about this company: how did it manage to get through the winter? Can 2026 bring a truly meaningful turnaround?

Industry backdrop: from “price wars” to “a brief chance to catch our breath”

First, let’s look at the big picture. In 2025, the lithium battery separator industry experienced a dramatic turnaround. In the first half, it was still fighting a price war—prices of 9μm (micron) wet-process separators were pushed down to almost no profit, and even top-tier companies couldn’t hold out. But in the second half, things suddenly changed.

On the demand side, both the new energy vehicle market and the energy storage market gained momentum. In 2025, China’s lithium battery separator shipment volume grew year over year by 44%, reaching 32.9 billion square meters. Especially in the energy storage sector, 314Ah large cells became the mainstream, accounting for more than 70%.

(Source: EVTank)

These large cells impose higher requirements on separator stability and consistency, causing downstream customers to accelerate the shift from dry-process to wet-process separators. The market share of wet-process separators rose from 78% in 2024 to nearly 83% in 2025.

On the supply side, the price war in the first half of 2025 compressed the profit margins of dry-process separators to the limit. At one point, the price gap between wet-process and dry-process narrowed to within 0.15 yuan per square meter, and many small factories couldn’t withstand it.

At the same time, leading companies also “learned the lesson.” Everyone reached a consensus of a “counter–over-competition” (反内卷) approach and no longer blindly expanded production capacity.

The result: the release pace of effective supply clearly slowed down.

With the combined force of both supply and demand, in the fourth quarter of 2025, the capacity utilization rate of wet-process separators exceeded 80%, approaching the 2022 peak—the top of the previous boom cycle. The industry officially entered a new stage of tight supply and demand balance.

Prices naturally started to recover. Starting in August 2025, the average price of 9μm wet-process separators increased by 0.07 yuan per square meter, and coated films rose by 0.1 yuan per square meter. Considering that separator capacity expansion cycles typically take 1.5 to 2 years, new supply in 2026–2027 will still be constrained.

There’s also a structural change worth noting: high-end products are even scarcer than regular ones. For example, 5μm ultra-thin wet-process separators have high technical barriers—fewer companies can make them—so the supply-demand gap may persist into the second half of 2026. For technology-leading top players, this translates into an opportunity for excess returns.

Of course, the industry isn’t all smooth sailing. You need to watch several key indicators:

Can capacity utilization be maintained at 80% or above? Can the price-increase plan be accepted by downstream customers? Can the scarcity of high-end products last? Will additional capacity be released more than expected?

If, in 2026, the growth rate of new energy vehicle sales is below 15%, or if the growth rate of energy storage installations is below 30%, the industry’s tight supply-demand balance could be broken.

Enjie’s ace card: how a global leader is forged

Enjie Co., Ltd. is the absolute leader in the wet-process separator sector. In 2025, its global market share exceeded 30%, firmly ranking first in the industry. In the domestic market, the figure is even higher—its market share in 2024 was about 45%.

In terms of capacity layout, the company not only pursues scale but also shows strategic foresight. Its overseas bases in Hungary, the United States, and Malaysia have already been built, serving global top customers such as CATL (Contemporary Amperex Technology), LG Energy Solution, Panasonic, and BYD. This meets their requirements for localizing the supply chain.

But the company’s competitive advantage comes from a “four-in-one” competition system it has built: equipment self-sufficiency, high-end technical capability, deep customer binding, and global-scale operations. These elements are linked together tightly; it’s difficult for competitors to replicate.

First is equipment. During the expansion cycle from 2019 to 2022, the company captured a first-mover advantage. It relied on scaling up to quickly spread costs, and its gross margin once exceeded 50%. At the end of 2025, the company also planned to acquire Qingdao ZK Hualian, meaning the equipment strategy upgraded from “locking external sources” to “internally autonomous and controllable.”

Second is technology. The company has already achieved large-scale mass production of 5μm high-strength base films. This material is both thin and strong, solving the industry’s longstanding challenge of making “thin” and “high-strength” compatible. The company is also advancing high-speed production lines with a width of 9 meters and a speed of 150 meters per minute, while building pilot and mass-production lines for solid-state electrolytes. These technical accumulations allow it to maintain strong pricing power in high-end markets.

Then there are the customers. The company’s customer roster almost covers all global top-tier battery manufacturers: CATL, EVE Energy (rights protection), CALB (China Lithium (International) Co., Ltd?)*, BYD, Panasonic, and LGES. And it’s not a simple buy-and-sell relationship—it’s a deep strategic binding.

In 2025–2026, the company and LGES and EVE Energy signed multi-year large supply agreements, locking in orders for dozens of billions of square meters for the coming years.

By participating in customers’ R&D in advance, the company can ensure its technology roadmap and customers’ next-generation battery demands evolve in sync. For new entrants, breaking into this customer network is extremely difficult.

(Source: Company’s official website)

Bottoming out financially: have the hardest days passed?

2024 was Enjie’s most difficult year. Full-year revenue was 10.16 billion yuan, down 15.6% year over year; attributable net profit to shareholders was a loss of 600 million yuan. Gross margin fell from nearly 50% in 2021 all the way to 11% in 2024. Especially in the fourth quarter, it recorded a loss of 1.1 billion yuan in a single quarter, and gross margin was even negative (-16.3%).

This is related to the company recording provisions for asset impairment at the bottom of the industry cycle and cleaning up inventory.

(Source: China’s Market Value Insights APP)

But in Q1 2025, things began to improve: revenue was 2.7 billion yuan, net profit turned positive to 139 million yuan, and gross margin rebounded to above 17%. The company’s 2025 full-year performance guidance indicates that its attributable net profit will recover to 110 million yuan–160 million yuan.

(Source: Company’s 2025 performance guidance)

On the cash flow side, although the company incurred losses in 2024, its net cash flow from operating activities still had a positive inflow of 1.16 billion yuan, indicating that the cash generation ability of its core business had not completely dried up.

At the end of 2024, the company’s asset-liability ratio was 44.5%. By the end of Q3 2025, the asset-liability ratio was 44.8%; the interest-bearing debt ratio was 32.5%. Financial leverage is relatively high, but it has not increased further.

(Source: China’s Market Value Insights APP)

Next, the key to the company’s financial repair lies in several indicators: can gross margin continue to climb back to above 20%? Can operating cash flow recover to the level of 2.6 billion yuan in 2023? Can the asset-liability ratio come down? If the gains from profit recovery are all used to repay debt, then shareholders will have limited room to receive distributions.

(Source: China’s Market Value Insights APP)

Although the company has strong foundations, it isn’t without hidden risks. There are mainly three:

First, technology substitution risk. Solid-state batteries are the “Sword of Damocles” hanging over traditional separators. The industry generally considers 2027 as a key window for solid-state batteries to commercialize, and by 2030, the global market size could reach 113.8 billion.

Although the company has already been laying out semi-solid and solid-state electrolytes—such as its controlled subsidiary Jiangsu Sanhe making semi-solid separators, and Hunan Enjie Frontier New Materials building a 10-ton-class solid-state electrolyte production line—if it truly needs to replace at large scale, it still depends on how the technical route unfolds. If the company bets on the wrong direction, its existing business could be overturned.

Second, competition in the market doesn’t stop. The industry’s CR4 has already exceeded 70%, but competition between leading companies is actually fiercer. Xingyuan Materials is a direct competitor. It has comprehensive technology and customer coverage including CATL and BYD, with a market cap close to 20 billion yuan. After Foshuo Technology acquired Jinli New Energy, it also strengthened its capabilities significantly in the wet-process segment.

More importantly, product structure is diverging: high-end 5μm ultra-thin films are scarce, but for regular 7μm/9μm products, supply and demand are relatively more relaxed, and price pressure remains. In Q2 2025, the price of 7μm wet-process separators fell year over year by 25% to 0.73 yuan per square meter. If Enjie cannot continue increasing the share of high-end products, the overall gross margin recovery will be constrained.

Third, governance and financial issues. In April 2025, the company was ordered by the Yunnan Securities Regulatory Bureau to make corrections and was recorded in its integrity file due to violations in募集资金 management (fund raised management). This directly reflects gaps in internal control.

In addition, in the first half of 2025, the controlling shareholder and its related parties had operating-related receivables/payables exceeding 120 million yuan, and the company’s intercompany loan balance to its subsidiaries was as high as 8.96 billion yuan. Large-scale internal capital transactions—if not transparent enough—can easily raise market concerns about how efficiently capital is being used.

The turning point is here, but the road is still long

2025 is the starting point for the company to climb out of the trough. In 2026, whether it can move more steadily and higher depends on three things: can prices keep rising, can leverage be reduced, and can the impact from solid-state batteries be effectively offset?

For investors who are willing to track cycles and can withstand volatility, this might be an observation window right now—after all, the signals of an industry turnaround have already appeared, and the leading company’s “core business base” is still in place. But for friends seeking stability, it may be worth checking whether it can deliver more solid financial reports, whether leverage can come down, and whether there are substantive breakthroughs in technological transformation.

After all, a turnaround is only step one; whether it can go far is what really matters.

Disclaimer: This report (article) is based on independent third-party research, primarily using the public company attributes of listed companies, and the information disclosed by the listed company according to its statutory obligations (including but not limited to interim announcements, periodic reports, and official interaction platforms, etc.). China’s Market Value Insights strives to ensure the contents and viewpoints contained in this report (article) are objective and fair, but does not guarantee their accuracy, completeness, timeliness, etc. The information or opinions expressed in this report (article) do not constitute any investment advice. China’s Market Value Insights shall not bear any responsibility for any actions taken based on this report.

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Responsible editor: Yang Hongbo