Canmax Technologies Co., Ltd. submitted its prospectus to the Hong Kong Stock Exchange on April 2, aiming for a dual A+H listing, yet more than four months have passed without a green light. During this critical window for its Hong Kong IPO, the China Securities Regulatory Commission has issued supplementary filing requirements, raising six core verification items—the most closely watched being a demand for full disclosure of related-party transactions with its second-largest shareholder, CATL, to justify pricing fairness and rule out any improper benefit transfers.

With the lithium cycle recovering to lift earnings on one hand, and heightened regulatory scrutiny over substantial related-party deals on the other, Canmax faces a pivotal test on its road to a Hong Kong debut.

Where the story begins

Founded by Pei Zhenhua in Suzhou in 1997, Canmax has navigated nearly three decades of evolution, completing two pivotal strategic pivots. Initially specializing in antistatic and ultra-clean products—a niche it held for over a decade—the company listed on Shenzhen's ChiNext board in 2014.

In 2015, Canmax made its first cross-industry move by acquiring Yushou Medical to enter the medical devices sector, broadening its business mix. Then in 2018, a new industry landscape emerged when Canmax joined forces with CATL to establish Tianyi Lithium, formally stepping into the new-energy lithium battery materials space—its second major transformation. From that point, the company's fortunes became deeply intertwined with the lithium supply chain.

Riding the rapid rise of its lithium salt business, Canmax evolved into a leading domestic producer of battery-grade lithium hydroxide, with operations spanning three pillars: new-energy lithium materials, antistatic ultra-clean products, and medical devices.

The defining moment that locked Canmax and CATL together in the market's eyes came in October 2025. At that time, the company's largest shareholder group—Pei Zhenhua and his wife Rong Jianfen—transferred 108 million A-shares to CATL, lifting the battery giant to a 13.54% stake and making it the second-largest shareholder. This gave CATL a dual role as both a major equity holder and a core customer, a unique overlap of commercial and ownership ties that set the stage for the regulatory scrutiny now underway.

Financial strain and a sharp rebound

According to the Hong Kong prospectus, Canmax felt significant pressure in 2025 as lithium salt prices declined. The company's profit for that year fell to 457 million yuan, down 55.6% from 1.029 billion yuan in 2024, while overall gross profit slipped from 1.364 billion yuan to 1.058 billion yuan, a 22.5% drop, and gross margin narrowed from 20.6% to 14.0%.

The new-energy lithium materials segment, which contributes close to 90% of revenue, bore the brunt of falling lithium prices. Its gross profit dropped from 1.098 billion yuan in 2024 to 786 million yuan in 2025, down 28.4%, with segment margin sliding from 19.1% to 11.8%.

The prospectus attributes the earnings strain to shifting market dynamics: the average price of battery-grade lithium hydroxide in China fell from 233,000 yuan per tonne in 2023 to 72,000 yuan in 2024, and further to 63,000 yuan in 2025. Likewise, battery-grade lithium carbonate prices dropped from 230,000 yuan per tonne in 2023 to 81,000 yuan in 2024, and then to 68,000 yuan in 2025.

The industry tide turned in the second half of 2025, as hydroxide and carbonate prices bottomed out and rebounded, fueling a dramatic earnings recovery for Canmax. In the first quarter of 2026, the company's non-GAAP net profit reached 946 million yuan, up over 35 times year-on-year. By August 18, its semi-annual report showed first-half non-GAAP net profit of 2.267 billion yuan, a staggering 1,739% increase.

Focus on related-party dealings

Just as 2026 performance surged, the CSRC issued its supplementary filing notice, requesting six additional verification items—the most market-sensitive being the related-party transactions with CATL. The company must detail all such transactions during the reporting period, demonstrate pricing fairness, and confirm no improper benefit transfers occurred.

The prospectus reveals two recurring types of related-party dealings with CATL: product sales and processing services. From 2023 to 2025, revenue from product sales to CATL stood at 2.537 billion yuan, 909 million yuan, and 1.348 billion yuan, respectively, while processing service income was 2.832 million yuan, 344 million yuan, and 388 million yuan.

Canmax has outlined its pricing policy for these transactions in the prospectus. It states that consideration for lithium materials and antistatic ultra-clean products sold to CATL is determined on normal commercial terms after fair negotiation, with terms no less favorable than those offered to independent third parties in comparable deals. Pricing for lithium battery materials primarily references prevailing market rates from leading industry platforms such as Shanghai Nonferrous Metals, with further negotiation based on market supply and demand. Final prices also factor in product specifications, order volumes, delivery terms, and current market conditions, alongside production costs and historical transaction prices.

Internally, quotes to CATL undergo a review and approval process. Proposals are typically vetted and confirmed by the general manager and relevant sales directors before being sent to the customer.

From a regulatory perspective, the "shareholder-plus-major-customer" model is a focal risk point in overseas listing reviews. Market analysts widely view the supplementary inquiry as a routine step in the filing process, not a rejection of the IPO application, but the quality of the response will directly affect approval timelines. If the company can provide robust, verifiable evidence of pricing fairness, the Hong Kong listing should face no material hurdles; if transaction details remain inadequately explained, the pace of the dual A+H listing could slow.

So what additional clarifications will Canmax offer in response to the CSRC's demands? Will this inquiry hinder its Hong Kong listing? In light of investor concerns, this publication recently reached out to Canmax via email but had not received a reply by press time.

For Canmax, the lithium price rebound in 2026 has delivered a strong earnings turnaround, creating favorable fundamentals for its A+H ambitions. Yet the regulator's questions on related-party transactions now stand as an unavoidable hurdle. How convincingly the company can justify the fairness of its large-scale dealings with CATL and untangle potential conflicts arising from the mix of business and equity ties will be decisive to its success on the Hong Kong exchange. The progress of this dual-listing pursuit for a lithium materials firm that has twice reinvented itself remains well worth watching.