Financing with the left hand, distributing dividends with the right: Xien Technology—the 'sub-subcontractor'—rushed to go public amid the lithium battery boom, repeatedly failing performance bets and delivering extremely weak R&D.

The company operates two main production lines: (1) producing nickel sulfate and cobalt hydroxide as a by-product using nickel hydrometallurgical intermediates and nickel- and cobalt-containing waste materials; and (2) producing ternary precursor and lithium carbonate using spent lithium battery materials. The nickel sulfate production line commenced operations in 2012 and has maintained an annual capacity of 30,000 tons since 2019, with capacity utilization steadily increasing—reaching 92% in the first half of 2022. (Source: Prospectus) The ternary precursor and lithium carbonate production lines began operations in 2019 and have maintained annual capacities of 4,800 tons and 1,920 tons, respectively, since 2020. Capacity utilization for both lines rose significantly in 2021 compared to 2020—reaching 102% for ternary precursor and 88% for lithium carbonate. (Source: Prospectus) Thus, apart from growth in nickel sulfate sales, the company’s revenue increase since 2020 has been driven primarily by ramped-up output of ternary precursor and lithium carbonate. Their combined share of total revenue rose from just 1.5% in 2019 to 46.2% in the first half of 2022. (Source: Prospectus) Beyond volume growth, rising prices also contributed to revenue and profit expansion: average selling prices for nickel sulfate, ternary precursor, and lithium carbonate in the first half of 2022 increased by 65%, 85%, and 939%, respectively, compared to the full year of 2020—with lithium carbonate’s price surging tenfold being particularly conspicuous. (Source: Prospectus) Although lithium carbonate accounted for only 29% of revenue in the first half of 2022, it contributed a staggering 72% of gross profit. In contrast, nickel sulfate—which generated 47% of revenue—contributed only 8% of gross profit. (Source: Prospectus) Lithium carbonate’s gross margin has remained consistently around 50% since 2020, while nickel sulfate’s margin has fluctuated widely—slipping 13 percentage points year-on-year in the first half of 2022 to just 3.5%. Clearly, the company’s profit growth in the first half of 2022 stemmed mainly from its lithium carbonate and ternary precursor production lines, whereas nickel sulfate’s price growth lagged behind its cost increases. (Source: Prospectus) Nonetheless, overall, the company’s gross margin surged to 20% in both 2021 and the first half of 2022, while net margins rose to 11% and 14%, respectively. In short, the company’s current overall situation appears robust and promising—making its timing for going public appear quite astute. (II) Intensifying competition: The company remains a minor player As the saying goes, “No flower blooms for a hundred days.” With new lithium mine supplies coming online, how long can lithium battery material prices sustain their current high levels? Can the company continue passing on sharply rising raw material procurement costs for its ternary precursor and lithium carbonate lines to downstream customers? Currently, the company sources spent lithium battery materials as primary feedstock for its ternary precursor and lithium carbonate lines, engaging in resource recovery and recycling. It also holds hazardous waste disposal capabilities, enabling it to treat process-generated slag in-house—eliminating external disposal fees while recovering some usable raw materials—thus conferring a certain cost advantage. In 2021, the company’s ternary precursor gross margin—approximately 20%—was comparable to that of GEM (002340.SZ), a peer with a similar business model, and higher than that of Fangyuan Co., Ltd. (688148.SH), which procures crude nickel-cobalt feedstocks.

USD 6.4 million: Food giant General Mills leads investment in U.S. synthetic biology firm, launching edible colorant 'Red+'

With this new funding, Michroma plans to commercialize Red+ in the near term and scale up its production process from pilot to industrial scale. After conducting prototyping work with several major food companies, Michroma is now negotiating agreements regarding Red+. Additionally, the company will submit color additive applications to the U.S. FDA and the European Food Safety Authority (EFSA). Unlike today’s first-generation natural colorants—such as betanin, carminic acid, and anthocyanins—which suffer from poor stability, Michroma’s Red+ offers pH stability and heat resistance, enabling it to withstand common food processing methods like pasteurization and extrusion. This makes Red+ an ideal coloring solution across diverse food categories—including baked goods, beverages, confectionery, meat, and plant-based meat alternatives. This superior-performance natural colorant is derived from filamentous fungi. “These fungi are highly complex microorganisms—more difficult to engineer and ferment than yeast,” says Ricky Cassini, co-founder and CEO of Michroma. “Yet they offer significant advantages in titer yield and secretion systems: fungi achieve higher titers and possess the most efficient secretion system among all microbes.” Michroma’s fungal fermentation platform integrates bioinformatics, synthetic biology, precision fermentation, organic chemistry, and data science: advanced algorithms and predictive models; synthetic biology toolkits and engineered chassis strains; cutting-edge bioreactors; iterative bioengineering principles and growth kinetics modeling; conventional and computational chemical analysis; and data analytics and informatics to accelerate product development, optimize outcomes, and enhance results. In terms of pricing, Red+ will compete with other natural colorants—though it remains more expensive than chemically synthesized dyes. Yet cost is not Cassini’s primary concern: “Driven by consumer pressure and increasingly stringent regulations, food companies are shifting from synthetic to natural colorants. We believe this transition is inevitable—and will happen sooner rather than later. While we still need to drive down costs to make Red+ cheaper than synthetic dyes, I’m confident that goal is achievable within the next few years.” In many respects, Michroma’s greatest value lies not merely in replacing existing colorants—but in its underlying production platform itself. After successfully developing Red+, the team realized the platform could produce other colors—and even flavors and fragrances. Ultimately, Michroma aims to sell these novel colorants and other ingredients as bundled ingredient packages to food and ingredient manufacturers. In theory, such bundles could meet multiple customer needs—not just color or flavor alone. “We aim to build an integrated ingredient portfolio that delivers comprehensive solutions to food companies. This will create substantial differentiation compared to competitors,” Cassini said.

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