Market Dynamics Surrounding Mianyang Fulin Precision Machining Co., Ltd. (300432)
Mianyang Fulin Precision Machining Co., Ltd. (hereafter Fulin PM), a Shenzhen‑listed enterprise in the consumer discretionary sector, has positioned itself at the nexus of automotive component manufacturing and advanced battery materials. With a market capitalization of approximately 32.7 billion CNY and a price‑earnings ratio of 79.34, the company has attracted considerable attention from both industry analysts and institutional investors.
1. Strategic Alignment with the Lithium‑Iron‑Phosphate (LiFePO₄) Upsurge
On 28 October, the company’s controlling subsidiary, Jiangxi Shenhua New Materials Co., entered into a joint‑venture agreement with the wholly‑owned subsidiary of Chufang Longmang (DEYANG) to launch a 17.5 thousand‑tonne‑per‑year high‑pressure LiFePO₄ project. The joint venture, named Fulin Longmang New Materials Co., will be financed with a registered capital of 6.6 billion CNY (Jiangxi Shenhua contributing 51 % and DEYANG 49 %) and a total projected investment of 1.96 billion CNY. The venture aims to capitalize on the growing demand for high‑density, high‑temperature LiFePO₄ cathodes, a segment that has recently attracted significant strategic investments from top battery manufacturers.
The timing of this partnership is critical. Earlier that day, leading battery producer CATL announced a pre‑payment of 1.5 billion CNY to Jiangxi Shenhua for securing LiFePO₄ supply, with an annual procurement commitment covering at least 80 % of the plant’s output between 2025 and 2029. This move signals a shift from price‑driven competition to a focus on value, technology, and global supply‑chain integration—an environment in which Fulin PM’s precision machining capabilities and battery material expertise can be leveraged most effectively.
2. Expanding Product Footprint Beyond Automotive Components
Fulin PM’s core competency lies in the design and manufacture of high‑precision automotive engine parts, such as hydraulic tappets, valve rockers, variable valve systems, and direct‑injection components. The company’s diversification into lithium‑ion battery cathode materials is a deliberate strategy to mitigate cyclical volatility in the automotive market and to tap into the rapidly expanding electric‑vehicle (EV) sector. The joint venture with DEYANG represents the first large‑scale, end‑to‑end LiFePO₄ production facility to incorporate Fulin PM’s proprietary machining technologies, ensuring stringent dimensional tolerances and material purity that are essential for battery performance and safety.
3. Implications for Valuation and Growth Trajectory
Given the current share price of 19.13 CNY (as of 28 October 2025), the company sits below its 52‑week low of 11.62 CNY and significantly below its 52‑week high of 24.90 CNY. The price‑earnings ratio of 79.34, while high, reflects expectations of substantial upside driven by the battery‑material expansion and the anticipated lift in automotive demand for high‑performance components.
The capital infusion from the joint venture and the strategic partnership with CATL are expected to unlock new revenue streams and improve operating margins. Analysts project that the LiFePO₄ arm could contribute 15–20 % of total revenues by 2027, while the precision machining business will continue to dominate the top‑line with a projected CAGR of 8–10 % over the next five years.
4. Risks and Catalysts
- Supply‑chain Concentration: The joint venture’s success hinges on securing a stable supply of lithium and phosphate raw materials, which could be affected by geopolitical or market disruptions.
- Regulatory Environment: The battery‑material sector is subject to evolving environmental and safety regulations; compliance costs may rise.
- Competitive Dynamics: While Fulin PM benefits from niche precision machining expertise, larger battery‑material manufacturers are also expanding capacity, potentially eroding market share.
Conversely, the company’s close ties with CATL and the strategic partnership with DEYANG serve as strong catalysts. The joint venture’s planned output of 17.5 thousand tonnes per year positions it as a key player in the global LiFePO₄ supply chain, especially as EV adoption accelerates across Asia and Europe.
5. Forward Outlook
The confluence of Fulin PM’s precision machining heritage, its entry into high‑grade battery materials, and the recent strategic alliances signals a decisive pivot toward high‑value, technology‑driven growth. Investors should monitor:
- Production Milestones – The timeline for the LiFePO₄ plant’s commissioning and initial output.
- Order Book Dynamics – The progression of CATL’s procurement commitments and any expansion of the customer base beyond the initial agreement.
- Financial Performance – The incremental contribution of the battery arm to revenue and earnings, and the impact on gross margins.
With its diversified product portfolio and robust strategic partnerships, Mianyang Fulin Precision Machining Co., Ltd. is poised to capture a significant share of the burgeoning EV battery market while sustaining its legacy in automotive precision components. The company’s trajectory will likely continue to attract institutional interest, especially from funds focused on the intersection of automotive engineering and sustainable energy technologies.
