Ask AI · Can Dinglong Co., Ltd.'s crossover into lithium battery materials replicate the success in semiconductors?

Text | Dong Wuying

By 2025, benefiting from the rapid development of the AI industry, the semiconductor supply chain generally experiences a hot market, with many semiconductor equipment and material listed companies achieving record-high performance. Dinglong Co., Ltd., which specializes in CMP polishing pads used for semiconductor wafer polishing, is one of them.

Recently, Dinglong Co., Ltd. released its 2025 annual report, with revenue increasing by 9.66% year-on-year to 3.66 billion yuan, and net profit attributable to the parent company rising by 38.32% year-on-year to 720 million yuan, both hitting record highs. At the same time, Dinglong announced its Q1 2026 performance forecast, expecting net profit attributable to the parent of 240-260 million yuan, a year-on-year increase of 70.22%-84.41%, surpassing market expectations.

Driven by performance, Dinglong’s stock price hit a record high on March 27, 2026, with a market value exceeding 51 billion yuan. It then pulled back slightly, and as of April 2, 2026, its latest market value reached 45.06 billion yuan.

Alongside rapid performance growth, Dinglong recently announced the acquisition of 70% of Haofei New Materials, a leading lithium battery auxiliary material company, for 630 million yuan, attracting widespread market attention. In this crossover into lithium battery materials, can this semiconductor material leader tell a new story?

Starting a Business in the Industry, Two Brothers Create a 46 Billion Chemical Industry Leader

In the business world, there are many cases of two brothers collaborating to start a company, such as the Ruans who founded Gou2wan to create Gouniu Group with 20k yuan; Liu Weiping and Liu Fuping, who started WeLion with 50 cents of spicy strips and became the richest in Luohe; and Zhang Xuaning and Zhang Xuan Song, who moved bricks on construction sites before building Yonghui Supermarket. Dinglong’s origin story is also one of two brothers starting a business and creating a legendary industry leader.

Born in 1964, Zhu Shuangquan graduated from Wuhan University and then entered the system, serving as a cadre at the Hubei Provincial Federation of Trade Unions and as a department manager at Hubei International Economic and Foreign Trade Corporation. Born in 1968, Zhu Shunquan’s career path was quite similar: after graduation, he served as a department manager at Wuhan Chemical Import and Export Corporation and at China Hubei International Economic and Technical Cooperation Corporation.

Both brothers worked in foreign trade. During this period, Zhu Shuangquan discovered that Japanese companies imported raw materials from China, processed them domestically into charge control agents, and then exported them back to China. The price difference was nearly tenfold, and he quickly realized this was a huge business opportunity.

Charge control agents are one of the key materials for printer toner. Because copiers and printers operate based on electrostatic technology, toner must carry a certain charge to complete printing and copying, requiring charge regulation.

At that time, charge regulation agents were almost entirely monopolized by Japanese companies. Zhu Shuangquan used his own raised million-yuan fund to establish Dinglong Chemical in 2000, buying a dilapidated factory, which is the predecessor of Dinglong Co., Ltd.

Conditions were tough at the start—there was no direct transportation to the factory, and employees lived on-site from Monday to Friday. The company was always losing money but never delayed paying wages. The Zhu brothers even borrowed high-interest loans in their personal names to ensure timely wages.

In 2002, Dinglong developed salicylic acid series charge regulation agents, but customers doubted domestic products and even said, “Don’t want money, but dare not use them.” Fortunately, at that time, the U.S. laser printer leader Lexmark was updating its production line. Dinglong participated in the bidding competition against Japanese companies. Within three months, Dinglong developed qualified products, successfully entered Lexmark’s supply chain, and broke the Japanese monopoly.

By 2006, after just turning a profit in charge regulation agents, Dinglong increased investment in R&D for more difficult color polymer toners, which took six years to produce, achieving import substitution. During this period, in February 2010, Dinglong successfully went public on the Growth Enterprise Market (GEM).

Having reached an international advanced level in charge regulation products, Dinglong’s R&D journey did not stop. In 2012, Dinglong decided to enter the semiconductor materials field, focusing on CMP polishing pads. These are consumables used to grind wafer surfaces, with nanometer-level precision, making them extremely challenging.

In the following years, Dinglong achieved full self-production of three core raw materials for CMP polishing pads—prepolymer, microspheres, and buffer pads—and in 2016, successfully launched CMP polishing pads, breaking foreign dominance. According to Changjiang Daily’s June 2025 report, Dinglong’s CMP polishing pads now hold about 70% of the domestic market share.

Dinglong then deepened its focus on semiconductor materials. In 2015, it entered the optoelectronic display industry, developing photoresists (PSPI) for OLEDs and encapsulation materials (INK), making breakthroughs in 2019. In CMP materials, it continued R&D on cleaning and polishing liquids, with the first phase of CMP cleaning and polishing liquid industrialization completed and put into production in 2021. In 2022, it launched R&D for high-end KrF/ArF wafer photoresists, and recently, Dinglong’s annual production of 300 tons of KrF/ArF photoresist industrialization project was successfully put into operation.

With the explosion of downstream markets like storage chips, Dinglong’s semiconductor business has experienced rapid growth. In 2025, its revenue from semiconductor materials and chips reached 20k yuan, a 37.27% increase year-on-year, accounting for 57% of total revenue. Among these, CMP polishing pads generated 2.09B yuan, up 52.34%; cleaning and polishing liquids reached 294 million yuan, up 36.84%; and semiconductor display materials earned 544 million yuan, up 35.47%.

In the first quarter of this year, Dinglong forecasted net profit attributable to the parent of 240-260 million yuan, a year-on-year increase of 70.22%-84.41%, with brokerages generally believing this performance exceeded market expectations.

Amid the high prosperity of the semiconductor industry and rapid performance growth, Dinglong’s stock price recently hit a record high, with a market value of 45 billion yuan. Meanwhile, this semiconductor materials leader is also crossing into lithium battery materials, laying out a new growth point.

630 Million Yuan Acquisition of Haofei New Materials, Cultivating a New Growth Pole in Lithium Battery Materials

While its semiconductor business maintains rapid growth, Dinglong has begun to expand into new areas. It acquired a 70% stake in Haofei New Materials for 630 million yuan, crossing into the lithium battery materials sector, attracting broad attention from capital markets.

According to an external investment announcement released by Dinglong at the end of January this year, Haofei New Materials’ main products include lithium battery dispersants, binders, and customized functional auxiliary materials, holding over 40 related invention patents. Its clients include many top domestic and international new energy manufacturers, with a leading market share among downstream suppliers of similar products. It is currently the top domestic enterprise in new lithium battery dispersants.

Data shows that by the end of 2023 and 2024, Haofei New Materials’ equity was 101 million yuan and 96.19 million yuan, respectively. As of November 30, 2025, its equity increased to 258 million yuan. In 2023 and 2024, its revenue was 290 million yuan and 345 million yuan, respectively, and in the first 11 months of 2025, revenue grew to 481 million yuan.

In the announcement, Dinglong stated that due to confidentiality, it would not disclose specific profit data for Haofei New Materials, only indicating that the valuation of 900 million yuan for this acquisition corresponds to a P/E ratio of no more than 10 times.

For Dinglong, acquiring 70% of Haofei New Materials means accelerating into the new energy materials track and further cultivating new growth drivers.

As mentioned earlier, the semiconductor materials business has become Dinglong’s main operation, maintaining high-speed growth in recent years. However, its original business of general printing and copying consumables has significantly slowed. In 2024, revenue was 1.7 billion yuan, flat year-on-year. In 2025, this business’s revenue declined to 1.09B yuan, down 12.97% year-on-year, but still accounting for 42.59% of total revenue. The decline in this business has somewhat dragged down Dinglong’s overall revenue growth.

Dinglong’s acquisition of Haofei New Materials reflects its optimism about the broad prospects of the lithium battery auxiliary materials sector. In 2025, the global lithium battery market maintained high growth, with shipments increasing over 47% year-on-year, and energy storage battery shipments increasing over 76%, driving demand for lithium battery binders and dispersants. Industry reports project that this niche market could surpass 20 billion yuan by 2030.

In the announcement, Dinglong stated that the 630 million yuan used for this acquisition would come from its own funds or self-raised capital, which has raised some concerns about its debt levels.

Since 2023, Dinglong has begun large-scale investments, with fixed assets and construction-in-progress increasing from 1.56B yuan at the end of 2022 to 1.35B yuan at the end of 2025, more than doubling over three years. Coupled with increased R&D spending, its long-term borrowings rose from 197 million yuan at the end of 2022 to 926 million yuan at the end of 2025. To support expansion and operations, Dinglong also issued convertible bonds in 2025, raising an additional 910 million yuan.

This has directly led to its asset-liability ratio rising from 20.22% in 2022 to 39.17% in 2025. In 2025, Dinglong’s financial expenses reached 49.67 million yuan, maintaining high growth for three consecutive years.

As of the end of 2025, Dinglong’s cash and cash equivalents totaled 3.13B yuan. If the acquisition of Haofei New Materials succeeds, its cash reserves will significantly decrease, while goodwill will increase markedly, posing certain financial risks.

However, Dinglong is also initiating further fundraising plans. In mid-January, it announced plans to issue H-shares on the Hong Kong Stock Exchange, and recently published its corporate regulations applicable after the H-share listing. If successful, this will provide more financing channels to support development and ease debt concerns.

Overall, just as Dinglong has continuously developed new materials and expanded into new businesses over the past 26 years, it is now leveraging its leadership in semiconductor materials to start a new journey into lithium battery auxiliary materials. Whether this strategic move can help Dinglong achieve further breakthroughs remains to be seen.