Analysis of the Impact of Haichen Energy Storage's Patent Litigation on Its IPO Process

Haichen Energy Storage is currently facing multi-dimensional legal attacks from CATL, which poses significant uncertainty to the company’s IPO process. In June 2025, CATL filed a lawsuit against Haichen Energy Storage and six related parties with the Intermediate People’s Court of Ningde City on the grounds of “unfair competition disputes”, claiming more than 150 million yuan in damages [1][3]. More substantially, in September 2025, CATL initiated a total of seven patent lawsuits against Haichen Energy Storage regarding nine patents [1]. In addition, there is unfavorable news on the criminal litigation front: in July 2025, Feng Dengke, a former employee of CATL and current head of Haichen Energy Storage’s Engineering Department, was taken into mandatory measures by the Xiamen police on charges of “infringement of trade secrets” [3][5].

Notably, on December 12, 2025, the equity of some of Haichen Energy Storage’s subsidiaries and the shareholding platforms related to its founders has been judicially frozen [3]. This judicial preservation measure indicates that the litigation balance is tilting against Haichen Energy Storage, and it also means that regulators and investors will have deeper doubts about the company’s technical compliance and ability to continue operations.

Haichen Energy Storage’s IPO journey has been full of twists and turns. The company first submitted its listing application to the Hong Kong Stock Exchange on March 25, 2025, and then submitted its second main board listing application on October 27 (only one month after the first application expired) [5][6]. Given the urgency of the time window, the company actually carried out a third application submission on the same day [6].

From the financial data, Haichen Energy Storage has indeed shown an amazing growth rate: the compound annual growth rate (CAGR) of revenue from 2022 to 2024 was as high as 89%, with revenue reaching 6.971 billion yuan in the first half of 2025 and 12.917 billion yuan for the full year of 2024 [5][6]. In terms of lithium-ion energy storage battery shipments, the company ranked third in the global energy storage market in 2024 [5]. However, behind these impressive data lies serious structural financial problems.

The Hong Kong Stock Exchange’s listing rules require issuers to fully explain the impact of major litigation. The current patent litigation faced by Haichen Energy Storage involves the legitimacy determination of the company’s core technologies. If the judgment involves core technologies, it may require the suspension of sales of related products, which will directly affect the company’s ability to continue operations [2]. Being entangled in major litigation will make the listing process uncertain, and the Listing Committee will inevitably require the company to provide detailed litigation impact assessments and risk warnings [5].

CATL accuses Haichen Energy Storage of not only violating non-compete agreements but also systematically “poaching” core technical talents. Many members of Haichen Energy Storage’s executive team, including Chairman Wu Zuyu, have previously worked at CATL [3]. This highly overlapping personnel background, combined with Haichen Energy Storage’s rapid growth in shipment speed (with a CAGR of up to 167%) despite low R&D investment (a total of only 1.212 billion yuan from 2022 to 2024), has raised reasonable doubts from the outside world about the source of its technologies [1]. If the litigation evidence chain is confirmed, it will have a fundamental impact on the company’s technical image and valuation logic.

Judicial freezing of equity is a more serious signal. The freezing of the equity of subsidiaries and the founder’s shareholding platform on December 12 [3] means that the litigation has entered the substantive preservation stage. This may not only affect the stability of the company’s governance structure but also make potential investors worry about the safety of IPO investments. In IPO reviews, clear equity is a basic prerequisite, and large-scale equity freezes will inevitably trigger regulatory inquiries.

The issues exposed by the patent litigation resonate with the company’s financial structural defects. Haichen Energy Storage’s book net profit in 2024 was 288 million yuan, but 414 million yuan of that came from government subsidies. After deducting subsidies, its main business was actually in a loss state [3]. The situation did not improve in the first half of 2025: net profit was 213 million yuan, while subsidies during the period reached 334 million yuan [3]. This model of relying on financial support itself has sustainability risks. If core technologies are found to be infringing and are banned, the company will lose its most core competitive support.

Comprehensive analysis shows that Haichen Energy Storage’s IPO prospects face significant uncertainty. The impact of the patent litigation may be reflected in three levels:

: In the short term, the Hong Kong Stock Exchange will inevitably issue multiple rounds of inquiries regarding the litigation, requiring the company to provide materials such as patent validity analysis, technical source explanations, and quantitative assessments of litigation risks, which will significantly delay the hearing process.

: In the medium term, if the litigation fails to reach a settlement or is withdrawn during the hearing, the Listing Committee may suspend consideration based on the principle of prudence and require the litigation to have a clear conclusion before proceeding.

: In the long term, even if it successfully lists, the continuous fermentation of the litigation will put sustained pressure on the company’s stock price performance and market confidence, especially against the background of increasingly strict ESG and compliance requirements from institutional investors.

Currently, Haichen Energy Storage seems to have adopted a “quick battle” strategy: seizing the time window through rapid repeated applications, while strengthening its image of technical leadership by releasing new technologies (such as 1300Ah battery cells) [4]. However, against the background of pending patent litigation and frozen equity, the effectiveness of this strategy is questionable. The company needs to provide more substantive evidence and responses to dispel the doubts of regulators and the capital market.

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[1] Guancha.cn - “Equity Frozen, Litigation Entangled: Haichen Energy Storage’s IPO Troubles Are Hard to Resolve” (https://user.guancha.cn/main/content?id=1575894)

[2] Caizhongshe.cn - “1300Ah Battery Cells Betting on Long-Duration Energy Storage: Haichen Energy Storage’s Technological Leap and Risk Attribution” (https://m.caizhongshe.cn/news-2975354538847485217.html)

[3] Sina Finance - “Equity Frozen, Litigation Entangled: Haichen Energy Storage’s IPO Troubles Are Hard to Resolve” (https://cj.sina.cn/articles/view/2729978983/a2b82c6700101encw)

[4] Sina Finance - “Haichen Energy Storage Rushes to Launch 1300Ah Battery Cells: Is It a Capital Game Behind?” (https://cj.sina.cn/articles/view/6873565549/199b2496d00101ga54)

[5] Eastmoney.com - “Litigation Unresolved: What Is the Prospect of Haichen Energy Storage’s Hong Kong IPO?” (https://finance.eastmoney.com/a/202512253602188367.html)

[6] Sina Finance - “Haichen Energy Storage’s IPO: A Gamble Under Price Involution?” (https://finance.sina.com.cn/roll/2025-12-17/doc-inhcaqym9156491.shtml)