Semcorp officially debuts on the Hong Kong Stock Exchange, aiming to make semiconductor materials its second growth curve.

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On June 23, lithium-ion battery separator manufacturer Senior Material (06067.HK) officially listed on the main board of the Hong Kong Stock Exchange, with CSC International acting as the sole sponsor.

The capital market showed great enthusiasm for the debut of this veteran new energy materials leader: its Hong Kong public offering was oversubscribed by more than 1,563 times. On its first trading day, Senior Material was priced at HK$8.98 per share, opening with an increase of over 38%, surging by more than 49% during the session, peaking at HK$13.41, and closing up 33.30% at HK$11.97 per share.

With this bell ringing, Senior Material has formally completed its capital market presence in Shenzhen, Switzerland, and Hong Kong.

Despite the extremely positive initial liquidity response from the capital market, amidst the current situation where the domestic new energy industry chain is collectively facing capacity shakeout and a shift to lower price centers, the industry's mid- to long-term assessment logic for Senior Material has substantially shifted: the market is no longer simply buying into the scale expansion narrative, but is rigorously evaluating the company's core business profitability bottom line, as well as its actual ability to realize a secondary growth curve in semiconductor materials.

As one of the earliest domestic lithium separator companies to break foreign technology monopolies, Senior Material's core foundation relies on massive production capacity. However, this scale moat on the industrial side has not translated into an absolute financial moat, and the company is facing the deep dilemma of “increasing revenue without increasing profit.”

Financial data show that from 2023 to 2025, Senior Material’s operating revenue rose from 3.013 billion yuan to 4.125 billion yuan, maintaining scale expansion; but during the same period, its net profit attributable to shareholders shrank sharply from 576 million yuan to 36.37 million yuan. The most severe signal is that its net profit (excluding non-recurring gains and losses) in 2025 has actually fallen into loss.

The core reason for the sharp decline in main business profitability lies in the slowdown of downstream new energy terminal penetration rate, coupled with a massive release of previously aggressively expanded separator capacity, with the resulting supply-demand reversal leading to intense price wars.

The profit margin per square meter across the industry has been greatly compressed, and Senior Material faces severe profit squeeze during this systemic downturn cycle.

Given the reality that core business (excluding non-recurring items) has turned from profit to loss, how to stabilize the foundation by increasing the proportion of high-margin overseas designated customer deliveries and optimizing production line yield has become a major challenge that must be overcome.

The profit-side pressure on the main business has pushed Senior Material to move into track with higher added value and currently enjoying domestic substitution dividends. At the June 23 listing ceremony, Senior Material's founder Chen Xiufeng explicitly signaled a strategic restructuring.

Chen Xiufeng stated that the company will rapidly increase capital investments in semiconductor materials, integrate global resources, and quickly build the company's second growth curve in semiconductor materials. The set goal: strive to turn the company into a well-known Chinese semiconductor materials enterprise within three to five years. In the future, Senior Material will formally establish a dual-track business model of "new energy materials + semiconductor materials."

Looking at its series of asset maneuvers, Senior Material’s path into semiconductors is not from a heavy-asset climb starting from scratch, but rather an attempt to buy time with capital. Through a strategic alliance with RS Technologies, a global leader in recycled wafer processing, Senior Material intends to leverage mature external technology ecosystems to shorten R&D and customer certification cycles in semiconductor segments.

Proceeds from the HK IPO will also be partially allocated to newly developed battery separator materials and semiconductor-related projects, providing funding for this cross-sector effort.

From an industrial logic perspective, the dual-track strategy is Senior Material’s natural choice to hedge the cyclical risks of a single business line, and semiconductor materials indeed offer better profit margins than lithium battery separators. However, spanning the two core manufacturing sectors is far from easy.

The semiconductor materials industry is characterized by long cycles and heavy asset nature, with extremely strict demands for process purity and yield consistency. Downstream wafer plant verification cycles are often measured in years. This means that substantial revenue scaling in this business will require long-term capital and technological investment before material results show up.

For Senior Material, the real short- and medium-term challenges remain at both ends: one is whether the loss-ridden lithium battery separator core business can halt the bleeding in a brutal price war and provide enough operating cash flow to support the capital-intensive early stage of semiconductor business; the other is whether its global resource integration efforts can truly break through barriers of cross-border coordination and technology transfer, and successfully achieve domestic industrialization of semiconductor materials.

Before this grand strategy is turned into substantive profits on financial statements, what lies ahead for Senior Material will be a tough, protracted battle requiring rigorous capital allocation and cross-sector integration capabilities.

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