Energized by strong profit growth, Zenergy Battery eyes Shenzhen IPO

The mid-tier EV battery maker is targeting domestic Chinese investors with its new listing plan, as it aggressively expands its capacity

Key Takeaways:

• Zenergy Battery expects to report its net profit rose between 45.5% and 81.8% during the first six months of 2026
• 15 months after its Hong Kong IPO, the new energy battery maker is seeking a second listing in Shenzhen to help bankroll an aggressive expansion

By Edith Terry

Jiangsu Zenergy Battery Technologies Group Co. Ltd. (3677.HK) has been on a fundraising roll since its April 2025 Hong Kong IPO, tapping the city’s global investor pool for nearly $200 million from the listing and a subsequent private placement last October. Now, it’s turning inward to domestic Chinese investors with plans for a Shenzhen IPO to continue expanding in a race for scale that could determine who survives in the overheated new energy battery industry.

The mid-tier battery maker has completed initial registration procedures with the Jiangsu securities regulator and officially entered the IPO tutoring process required for its planned listing on the Shenzhen Stock Exchange’s Nasdaq-style ChiNext board, according to media reports.

Those reports came just days before the company issued an upbeat earnings previewlast week, saying it expected to report its net profit rose between 45.5% and 81.8% in the first half of this year, equivalent to 320 million yuan ($47.4 million) to 400 million yuan, from 220 million yuan a year ago. Zenergy’s shares jumped by 4.2% the next trading day, but are still down 33% this year, reflecting investor concerns about the longer-term fate of mid-tier battery makers.

The company cited a gradual ramp-up of new production capacity for the profit jump, together with higher capacity utilization. Shipments of electric vehicle (EV) and energy storage system (ESS) batteries both rose substantially, with the latter posting “a significant increase” in revenue, Zenergy said. As its revenue grew, the company’s expense-to-revenue ratio also declined.

After losing money as recently as 2023, Zenergy began to show modest profits in 2024 with net income of 91 million yuan on revenue of 5.13 billion yuan that year. It moved squarely into the black with an 809 million yuan profit last year, as its growing scale, reflected by 58% top-line revenue growth, fueled by a 3.8 percentage point rise in its gross margin to 18.4%.

Well positioned

In a July research report, Goldman Sachs said Zenergy is poised to become the fastest growing company in China’s battery industry, and one of the few where every dollar invested exceeds the cost of capital. Goldman gave a target price of HK$13 for the company’s Hong Kong-listed shares, more than double its latest close of HK$5.585, reflecting its high growth expectations.

Nonetheless, investor skepticism is weighing on mid-range battery producers like Zenergy due to their constant need for cash as they race to catch up with top-tier players like industry leader CATL (3750.HK; 300750.SZ). Zenergy plans to double its capacity to 70.5 GWh this year from 35.5 GWh at the end of 2025 and further boost that to 120 GWh in 2027. Even so, those figures still pale compared with CATL’s 772 GWh in capacity at the end of 2025, with another 321 GWh under construction.

But Zenergy has more up its sleeve outside the cutthroat EV battery business. It sees new growth potential in both ESS batteries used to store excess power at solar and wind farms, and in batteries used to power a new generation of electric vertical takeoff and landing (eVTOL) aircraft. ESS batteries have gained strong momentum recently thanks to improving technology and strong demand from both residential and industrial customers, especially developers of power-hungry data centers used for AI applications.

Zenergy’s ESS revenue actually declined last year, falling to 5.2% of revenue from 9.1% in 2024. The company blamed that on production capacity constraints, which it said will be fixed through capacity expansion.

The Shenzhen listing is key to Zenergy’s plans for building scale. New flexible production lines can produce multiple types of batteries for EVs, energy storage and aviation powertrains. The company also has plans for marine EV batteries.

As of the end of 2025, Zenergy had used up about two-thirds of its IPO funds allocated for construction, but still had 350 million yuan earmarked for capacity expansion from its private placement.

A Shenzhen listing could give Zenergy a valuation boost of as much as 20% to 30%, since Mainland investors often value emerging industry companies more highly than their Hong Kong peers. Zenergy’s inclusion in a cross-border program last September making its Hong Kong shares available to Mainland investors gave the stock a temporary bump. But the shares have struggled this year on concerns over its longer-term prospects, despite Zenergy’s strong 2025 results.

Celebrity chairwoman

Zenergy’s rapid rise has cast its chairwoman and co-founder Cao Fang into the spotlight. Cao is the younger sister of Cao Dewang, one of China’s most famous entrepreneurs as founder of Fuyao Glass, the world’s largest specialized automotive glass company, with roughly one-third of the global market. Cao Fang is 12 years younger than her brother, now 81, and began working for him in 1997 at the age of 39 when Fuyao Glass was just 10 years old.

One observer likens Cao Fang to a top student from a famous martial arts academy who leaves to form her own school, integrating the original academy’s techniques but creating her own moves as well. In 2013, already a vice president of Fuyao Glass, Cao Fang and Fuyao executive director Chen Jicheng set up Changshu Sinogy Venture Capital.

The same year, Cao and Chen invested in a joint venture with Toyota to supply battery packs for the Japanese car giant’s hybrid vehicles in China. Cao Fang and Chen both left Fuyao in 2014, and two years later they bought the assets of Tafel, a battery maker founded by former CATL employees, which became Zenergy three years later. With backing from her older brother and his automobile industry network, her client list soon came to include big domestic names like FAW Hongqi, GAC Trumpchi, Leapmotor, SAIC-GM-Wuling, SAIC-GM, GAC Toyota and Volkswagen.

Based in the city of Changshu in East China’s affluent Jiangsu province, Zenergy’s Series A financing round raised 14.4 billion yuan and made it a local star. Cao Dewang has a 2.5% interest in the company. And despite his own retirement from Fuyao Glass in 2025, current Chairman Cao Hui, who is also Cao Fang’s nephew, is likely to keep up the close relationship between Zenergy and Fuyao Glass going forward.

Whether Zenergy’s Cao Fang can deliver on her strategy of diversifying from EV batteries to ESS and aviation batteries to reach scale is an open question. Her deep experience with the 11.1 trillion yuan Chinese auto industry will likely be one of the company’s biggest advantages as a shakeout looks likely in the hotly contested battery sector over the next few years.

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