Zhenhua New Materials (688707) Strong Performance Analysis: Sodium-ion Battery Industry Chain Catalysts and Fundamental Challenges

Zhenhua New Materials (688707) is a leading lithium battery cathode material enterprise listed on the Science and Technology Innovation Board. Its main business focuses on lithium-ion battery cathode materials (accounting for 96.33%[0]), with core products including medium-nickel, medium-high nickel, and high-nickel ternary cathode materials. In 2021, its market share of single-crystal cathode materials reached 26%[0]. In 2022, the company’s performance was strong, with revenue of 13.936 billion yuan (YoY +152.69%) and net profit of 1.272 billion yuan (YoY +208%[2]). Recently, the company entered the strong stock pool due to favorable factors in the sodium-ion battery industry chain: on November 17, 2025, boosted by the news of CATL’s sodium-ion battery cooperation agreement with Rongbai Technology[1], it rose by over 10% in a single day[0], and the main funds had a net buying of 38.2982 million yuan on that day[3].

However, the company’s current fundamentals face challenges: in the first three quarters of 2025, its main business revenue was 1.067 billion yuan (YoY -26.9%), with a net loss of 333 million yuan[0]. The company is actively deploying sodium-ion battery cathode materials and has achieved ten-ton-level sales[0], which has become a focus of market attention.

1. Divergence between Short-term Drivers and Long-term Potential
   : The recent market rise mainly reflects the future potential of the sodium-ion battery industry chain (such as demand expectations brought by CATL’s cooperation[1]), rather than current fundamentals (Q3 net loss[0]).
2. First-mover Advantage in Technology Layout
   : The company’s early deployment of sodium-ion battery cathode materials (ten-ton-level sales[0]) allows it to benefit from industry hotspots, and the cost advantage of the polyanion route may become a long-term growth point[0].
3. Capital Flow Signal
   : The net buying by main funds (38.2982 million yuan[3]) indicates positive short-term market sentiment, but attention should be paid to the risk of disconnect between fundamentals and stock prices.

• Current performance pressure: Revenue fell by 26.9% in the first three quarters, with a net loss of 333 million yuan[0], and there is uncertainty about short-term profit improvement.
• Technology commercialization risk: Large-scale application of sodium-ion battery materials still needs time to verify, and the current ten-ton-level sales scale is small[0].

• Growth of sodium-ion battery industry chain: Cooperation between leading enterprises such as CATL drives demand for sodium-ion batteries, and the company, as an early deployer, is expected to share the industry growth dividends[1].
• Capacity expansion potential: Existing capacity is 50,000 tons, with 132,000 tons under construction and planned[0]. If demand is released, capacity expansion can support future revenue growth.

The strong performance of Zhenhua New Materials (688707) is the result of the combined effect of short-term market sentiment (favorable factors for sodium-ion batteries[1]) and long-term technological potential (sodium-ion material layout[0]). Investors need to balance short-term market signals and long-term fundamentals, and pay attention to signs of performance improvement and the progress of sodium-ion battery technology commercialization.