Image source：China Visual

BEIJING, November 22 (TMTPOST)— The chairman and vice chairman of Yunnan Energy New Material, China’s leading lithium battery separator provider, have been put under surveillance in a designated residence by police, according to the company’s filing to the Shenzhen Stock Exchange on November 21. 

The company’s shares (SHE:002812) slumped by 10 percent to 140.17 yuan on Tuesday, the lowest since last May. With the investigation underway, the company said  its operations remained unaffected and it will “continue to follow the developments while fulfilling the obligation of information disclosure.”

Headquartered in southwestern China’s Yunnan province, Yunnan Energy is the largest lithium-ion isolation film provider, with a market share of nearly 40 percent in China in 2021, according to data from the economics research institute EVTank. As the product is an important part of lithium batteries that are commonly used in electric vehicles, the company has benefited from the takeoff of the electric vehicle industry. Its revenue in the first three quarters reached 9.28 billion yuan, representing year-on-year growth of 73.8 percent. Meanwhile, the net profit was 3.23 billion yuan, up 84 percent from the same period of last year.

“The lithium battery separator industry has witnessed explosive growth since 2021. As the production capacity is insufficient in the short term, the shortage of battery separators in 2022 and 2023 will not be alleviated,” the company said in an investor survey in August.

It has also been expanding its overseas businesses by building a manufacturing base in Hungary. In May 2022, it announced another plan to build a factory in the United States with an estimated investment of $916 million. Mainstream overseas battery companies have become the company’s customers.

Formerly known as Yunnan Chuangxin New Materials Group, the company was established in 2013 . It was listed on Shenzhen Stock Exchange in September 2016 . In 2018, the company’s name was changed to Yunnan Energy New Material Co., Ltd., with registered capital of RMB 473.86 million . Apart from battery components, it also produces tobacco packing materials and other printing packages.