Core Viewpoint - Fangyuan Co. has decided to terminate its investment of up to 3 billion yuan in the "battery-grade lithium carbonate production and comprehensive utilization project for waste lithium iron phosphate batteries" due to significant changes in market conditions and the company's operational strategy [1][3][4] Group 1: Project Termination - The project was initially announced in February 2023 with an investment of up to 2 billion yuan for a waste lithium iron phosphate battery recycling project, which was later changed to the current project in June 2023 [5][6] - The termination of the project comes after two years of planning, indicating a lack of progress and adaptation to market conditions [4][5] Group 2: Financial Performance - Fangyuan Co. has experienced a significant decline in gross margin, with projections indicating a drop to -5% in 2024, which is substantially lower than comparable companies [6][8] - The company reported a total revenue of 2.161 billion yuan in 2024, a year-on-year increase of 2.81%, but with a net loss of 427 million yuan, marking the second consecutive year of losses [8] Group 3: Debt and Funding Challenges - The company has faced increasing financial pressure, with its debt ratio exceeding 80% by the end of 2024, reaching a record high [9][10] - Fangyuan Co. has struggled to secure funding, with its IPO raising only 366 million yuan out of an expected 1.115 billion yuan, and subsequent attempts to raise capital through convertible bonds and private placements have also failed [10][12] Group 4: Market Position and Competition - The market share of ternary materials has been significantly reduced from over 60% in 2020 to around 25% in 2024, primarily due to the competitive pressure from lithium iron phosphate [12][15] - Ternary materials accounted for approximately 60.81% of Fangyuan Co.'s revenue in 2024, indicating that the company is heavily reliant on this segment, which is under increasing pressure [15]