Chinese enterprises seeking to expand overseas have to cede control first? Ronbay Technology pours 2.1 billion yuan into its loss-making South Korean factory, voluntarily slashing its controlling stake to 24.9% in exchange for access to the North American market.
Ronbay Technology cuts its South Korean shareholder stake to 24.9% to evade U.S. regulations, exchanging controlling rights for access to the North American market.
Recently, Ningbo Ronbay New Energy Technology Co., Ltd. signed an investment agreement worth 430 billion won (about 2.146 billion yuan) with North Chungcheong Province of South Korea, planning to build a new plant with an annual output of 64,000 tons of ternary cathode materials in Chungju, and the investment is targeted at an asset that has been loss-making for many years.
In 2025, the revenue of Ronbay Technology's South Korean subsidiary accounted for about 10.41% of the company's total revenue, but its net profit suffered a loss of 164 million yuan and failed to turn positive for consecutive years. Why would a still loss-making overseas plant receive additional investment of more than 2 billion yuan? The answer does not lie in the production capacity report of the Chungju plant, but in the equity restructuring plan of Ronbay Technology in March that was underestimated by most investors — a precise 24.9% accurate to one decimal place.
Who is forcing Ronbay to hand over controlling rights
The trigger of this restructuring is the "Big and Beautiful Act" launched by the United States in July 2025. The Act sets a recognition standard for "Prohibited Foreign Entities (PFE)": enterprises in which Chinese entities hold 25% or more shares will be recognized as PFE, and their downstream North American customers will not be able to apply for 45X tax credits. That means, as long as Ronbay Technology holds 25% or more shares in its South Korean subsidiary, all of its cell customers in North America will not be eligible for U.S. government tax incentives. South Korean JS is 100% owned by Ronbay Technology, so its PFE status is confirmed, and the total loss of North American customers is only a matter of time.
The consequences soon emerged, The South Korean plant cannot supply goods to the Chinese market due to economic reasons, and cannot effectively supply goods to Europe due to economic reasons and EU local production requirements, leading to idle production capacity and continuous losses. Ronbay Technology stated directly in its announcement that South Korean JS has "idle production capacity, continuous losses, and asset impairment, which seriously damages the company's interests".
Ronbay Technology's choice is: to reduce its equity to below 25% in exchange for a ticket to stay in the North American market.
The restructuring plan is elaborately designed. Ronbay Technology splits South Korean JS into two entities JSOld and JSNew, transfers 31% and 69% of JSOld's equity to Singapore AKB and South Korean AKB respectively, and introduces a global partner team composed of actual controller BAI Houshan and overseas partners, setting up a battery fund overseas as an important shareholder of Singapore AKB. After the transaction is completed, Ronbay Technology will indirectly participate in North American business only by holding 24.9% of the shares of Singapore AKB.
24.9%, only 0.1 percentage points lower than the red line. This Chinese enterprise changed itself from a controlling shareholder to a financial investor through a millimeter-precise structural adjustment. The South Korean ternary cathode production capacity with a total investment of 2.472 billion yuan will have its controlling rights handed over.
However, this path is not originally created by Ronbay. Canadian Solar also made the same proportion of adjustments to its U.S. business in a similar period, holding 24.9% of the shares and handing over 75.1% of the equity to the controlling shareholder CSIQ. Zhenjiang Co., Ltd. directly sold its U.S. subsidiary for a transaction consideration of 22.15 million U.S. dollars.
A 25% red line is systematically changing the equity structure logic of Chinese new energy enterprises going global. The difference is that Canadian Solar transferred its equity to related parties, and the controlling rights are in the hands of "insiders"; Ronbay Technology introduced external overseas capital, which means a more thorough transfer of controlling rights and more game variables in the future.
The second gamble of the Chungju plant
Giving up controlling rights is to hold the market, but Ronbay Technology's positioning of the Chungju plant itself is betting on a splitting market.
The South Korean lithium-ion battery cathode material market is expected to grow from about 120 billion to 150 billion U.S. dollars in 2026 to 280 billion to 350 billion U.S. dollars in 2035. The market cake is getting bigger, but the way of dividing it is changing. Ronbay Technology has deployed 60,000 tons/year of ternary cathode capacity and 6,000 tons/year of precursor capacity in Chungju, targeting the high-nickel NCM route. Its Chungju base has started shipping ultra-high-nickel precursors to global customers in 2025. This route still has demand in the high-end EV market, but the product structure of the South Korean cathode material market is changing rapidly.
In October 2026, POSCO Future M and Samsung SDI signed a long-term LFP cathode material supply contract worth 6 trillion won, with the supply period covering 2027 to 2032 and the supply volume exceeding 190,000 tons, which is more than twice the previously agreed scale. The scope of cooperation has been expanded from the original NCA cathode materials to LFP, LMO and synthetic graphite anodes, forming a "one-stop supply" system for battery materials, which is clearly marked as a "non-PFE material supplier".
As a result, Samsung SDI has locked in both the "non-PFE" status and the LFP route at the same time. This means that the North American energy storage market, the fastest-growing incremental track, is being preempted by local South Korean enterprises with the dual advantages of compliance and products.
SMM estimates that the output of ternary cathode materials in South Korea will drop by about 4.8% year-on-year in 2026, and LFP is becoming the main growth driver in the second half of the year in ESS and overseas precursor sales. The 64,000 tons of new capacity built by Ronbay Technology in Chungju is still dominated by NCM ternary materials, mainly targeting the high-end EV market; while the rapid growth of LFP is mainly concentrated in ESS and other fields, and the two are not completely in the same track. However, the overall shrinking trend of domestic ternary material output in South Korea still poses a challenge to its capacity digestion.
From the perspective of the pattern of the Chinese market, Ronbay Technology's capacity expansion has another layer of logic. In 2025, the CR5 concentration of China's ternary cathode material industry has risen to 68.2%, and Ronbay Technology's shipment ranking has dropped from the first to the third. The overall capacity utilization rate of the industry is only 68.5%, and the structural contradiction between overcapacity of low-end products and insufficient high-end capacity remains prominent.
The overcapacity that cannot compete in the domestic market must find an export. The gross profit of Ronbay Technology's overseas business in 2025 was -16.79 million yuan, which deteriorated significantly from 17.94 million yuan in 2024. After the South Korean JS production line was put into operation, the depreciation expense of fixed assets increased by about 70 million yuan compared with 2024. At the same time, affected by the "Big and Beautiful Act", the sales growth did not meet expectations, and the profit could not cover the increased depreciation cost.
The new production capacity in Chungju is an outlet to digest domestic overcapacity, and also a physical layout close to North American customers — but the mismatch between the product route of this layout and the overall shrinking trend of the South Korean ternary market is a problem that the restructuring plan cannot solve.
When going global becomes an architectural game
The September 2026 report on Chinese enterprises going global released by Goldman Sachs gives a set of reference data (the report covers 11 industries and 40 companies, the following are cross-industry average data): The total share of Chinese enterprises in overseas markets of the sample industries is about 18%, which is expected to rise to 31% by 2035, and overseas revenue is expected to reach 3.6 times the current level. The share growth rate will drop from about 2.5 percentage points per year to about 1.4 percentage points per year. Regional differentiation is more critical: The market share in the United States is only about 10%, about 16% in Europe, and about 24% in emerging markets.
Ronbay Technology's South Korean base strategy targeting the North American market falls exactly in the interval with the tightest geopolitical policy constraints and the most difficult share growth. This explains why it has to go through such a complex equity structure adjustment to fight for market access. The number 24.9% itself is an accurate measurement of the height of the North American market barriers.
The going global model is undergoing a silent paradigm shift. The traditional path is product export — selling goods abroad; the advanced path is capacity export — building factories next to customers. The path represented by Ronbay Technology is the third path: legal structure export. Setting up Singapore AKB, splitting South Korean JSOld and JSNew, precisely controlling the shareholding ratio at 24.9%, introducing overseas partner teams... The core of these operations is not technology, not cost, but precise adaptation to extraterritorial regulatory rules.
The 2026 survey report on Chinese enterprises going global shows that 68% of the surveyed enterprises have not established an overseas business risk control mechanism or only formulated basic plans, and compliance and risk are listed as one of the most challenging areas. Ronbay Technology's structural design in this time is an early attempt in the lithium battery industry, but the cost is also real.
The assessed value of 100% equity of South Korean JSOld is expected to be higher than 90 million U.S. dollars, corresponding to the assessed net asset value of about 669 million yuan. If the transaction is completed, Ronbay Technology will recover part of the funds through equity transfer, and the 1.088 billion yuan payable by South Korean JSOld to the company will also be settled before the closing.
If the transaction is completed, the loss-making assets will be removed from the financial statements, and the short-term pressure is expected to be relieved. But in the long run, the company will change from an absolute controlling shareholder to a minority shareholder with 24.9% shares, and its control right and income distribution right over the core overseas production capacity will be greatly diluted. As of October 15, 2026, the total market value of Ronbay Technology is about 15.3 billion yuan, and the dynamic P/E ratio is 70.12 times. The capital market has given a 70x P/E growth expectation, but if the transaction is completed, overseas business will no longer be consolidated.
This is a landmark moment for Chinese enterprises going deep into the global market. When the rules of globalization are upgraded from "tariffs" to "equity penetration", the legal structure design capability of enterprises, together with production capacity scale and technical barriers, has become the core competitiveness for going global. Ronbay Technology tries to use 24.9% to exchange for the North American market admission ticket, and use controlling rights to exchange for compliance status.
Whether this transaction is cost-effective depends on the actual growth rate of the North American EV and energy storage market, the tightness of the subsequent implementation rules of the "Big and Beautiful Act", and whether Ronbay Technology can maintain its actual influence on the Chungju plant through technology export and supply chain collaboration without controlling rights.
An overseas plant that is planned to be unconsolidated, a 24.9% shareholding ratio, a ticket that is precisely stuck under the regulatory red line. This is not the end of the going global story, but the beginning of another more complex one.