Shandong Fengyuan Chemical Co. Ltd. – Riding the Surge of the Solid‑State Battery Wave

Shandong Fengyuan Chemical Co. Ltd. (股票代码 002805) is a chemical‑raw‑material producer headquartered in Zaozhuang, China. The company specializes in oxalic acid, nitric acid, sodium nitrate and related products, and it also operates an international trade arm. Listed on the Shenzhen Stock Exchange, Fengyuan’s shares have recently moved sharply higher, echoing a broader rally in the battery and energy‑storage sector.

1. Market Context: A Battery‑Sector Rally

Over the past few days, Chinese equity markets have witnessed a pronounced escalation in the solid‑state battery (SSB) theme. According to Eastmoney reports dated 5 September and 8 September 2025, several SSB‑related stocks have hit the daily limit, including Fengyuan Chemical itself. Highlights from the reports are:

  • 5 September – Fengyuan’s shares surged to the 10‑day limit, joining a group that included Tianhua New Energy, Shangtai Technology, Putaile, and Yema Battery. The rise was accompanied by an average per‑trade volume increase of more than 50 % for 53 stocks, with Fengyuan ranking among them.
  • 8 September – The SSB theme was again in the spotlight, with Fengyuan, Tianji Co., Soft Control Co., and others hitting the limit. The sector’s momentum was reinforced by the fact that several companies (e.g., Yucheng Smart, Jin Yinhe) recorded gains above 15 % and 10 % respectively.

This surge reflects investors’ growing confidence that the transition to safer, higher‑energy‑density batteries will accelerate demand for the raw materials that Fengyuan supplies.

2. Fengyuan’s Role in the Supply Chain

Fengyuan’s core products—oxalic acid, nitric acid, and sodium nitrate—are key feedstocks for the synthesis of lithium‑ion battery components such as lithium hydroxide and lithium carbonate. In an era where battery manufacturers are exploring solid‑state chemistries, the demand for high‑purity acids and nitrates is expected to rise sharply. Fengyuan’s established production capacity, coupled with its international trade network, positions it to capture a share of this expanding market.

3. Stock Performance and Valuation

As of 4 September 2025, Fengyuan’s closing price stood at 14.61 CNH, well below its 52‑week high of 16.83 CNH (achieved on 13 November 2024) and 52‑week low of 9.5 CNH (on 8 April 2025). The company’s market capitalisation is approximately 3.62 billion CNH, and its price‑earnings ratio is –9.907, indicating that the stock is trading at a discount relative to its earnings, a common scenario for companies in high‑growth sectors yet still maturing.

The recent limit‑price movements suggest a short‑term demand spike; however, investors should weigh Fengyuan’s fundamentals—product quality, production capacity, and international reach—against the broader industry shift toward solid‑state batteries.

4. Outlook

  • Short‑Term: The current rally is driven largely by speculative interest in the SSB theme. Fengyuan may experience continued upward pressure on its share price as more battery‑related firms announce new projects and procurements.
  • Medium to Long‑Term: As solid‑state batteries progress from research to commercial deployment, the demand for Fengyuan’s raw materials is likely to grow. If the company can scale production and secure long‑term contracts, its earnings could rise significantly, potentially improving its valuation multiples.
  • Risks: Volatility in commodity prices, regulatory changes in the chemical industry, and competition from other raw‑material producers could temper growth. Additionally, the company’s negative earnings multiple signals that current profitability may lag behind growth expectations.

5. Conclusion

Shandong Fengyuan Chemical Co. Ltd. has found itself at the intersection of a pivotal shift in energy storage technology. The recent stock‑market activity, highlighted by multiple limit‑price gains, underscores the market’s enthusiasm for the solid‑state battery revolution. While the rally provides an attractive entry point for investors, a comprehensive assessment of Fengyuan’s operational strengths and the long‑term trajectory of battery technology will be essential to gauge the sustainability of its ascent.