On September 3, Luyin Investment Group Co., Ltd. announced that its controlling subsidiary, Luyin (Heze) Salt Co., Ltd., had publicly listed and introduced Wanhua Chemical (Yantai) Battery Industry Co., Ltd. as a strategic investor through a capital increase of RMB 333 million via the Shandong Property Rights Trading Center. Wanhua Battery obtained a 40% equity stake in Heze Salt.
From an operational standpoint, Heze Salt currently generates virtually no revenue. The company was established in 2023, reported zero revenue for both 2024 and 2025, with net profits of RMB 173,100 and RMB 17,800 respectively. For the first four months of 2026, it achieved revenue of RMB 125,000 and recorded a net loss of RMB 89,400. As of the end of 2025, the company had total assets of RMB 66.93 million and net assets of RMB 66.90 million.
Why would Wanhua invest RMB 333 million in a company with virtually no revenue and net assets of less than RMB 70 million?
What Wanhua values is not the salt itself, but the underground space created after salt mining.
Heze Salt's core asset is the exploration permit for the Maozhuang area rock salt mine in Shan County, Shandong Province, which the company won through bidding in 2024. From its inception, the company's business direction has been focused on salt production in the Heze area, as well as salt cavern gas storage and energy storage projects.
Currently, Heze Salt has signed a framework agreement with China Petroleum Group Gas Storage Co., Ltd. for the Shandong Heze Gas Storage Project, with a planned total investment of RMB 10 billion. In addition, Shan County has planned the construction of a salt cavern energy storage power station project with a total investment of approximately RMB 20 billion, in which Heze Salt is a core participant.
This is what makes Wanhua's capital increase truly noteworthy.
Wanhua Chemical has already designated battery materials as its "second core business." During the first-quarter 2026 earnings call, the company formally confirmed this strategy, placing its battery materials business alongside its polyurethane core business.
Around battery materials, Wanhua is developing a 160,000-ton-per-year lithium iron phosphate project and a 70,000-ton-per-year lithium carbonate project in Binzhou. The company expects to add 820,000 tons of lithium iron phosphate production capacity in 2026, with the first-phase 100,000-ton project in Haiyang having commenced production in March 2026. At the same time, Wanhua plans to achieve 7,000 MW of wind power and 5,000 MW of photovoltaic capacity in Shandong Province by 2030.
The demand for energy storage from these projects is not hard to understand.
Wind and solar power are inherently intermittent. After large-scale new energy integration, energy storage is needed to address the temporal mismatch between power generation and consumption. Salt cavern compressed air energy storage utilizes underground cavities formed by salt mining to store compressed air, enabling large-scale, long-duration energy storage.
Therefore, the Heze salt cavern project has a clear industrial synergy with the new energy and battery materials businesses that Wanhua is advancing. Wanhua is developing large-scale green electricity industrial parks in Haiyang and Laizhou, Shandong. Combined with the salt cavern energy storage project in Heze, this can further integrate green power supply, storage peak-shaving, and battery materials production.
Heze is also geographically well-positioned relative to Wanhua's industrial bases in Shandong, including Binzhou and Yantai.
Wanhua Chemical's RMB 333 million investment corresponds to more than just a 40% equity stake in Heze Salt. More importantly, it provides early access to the underground spatial resource of salt cavern gas storage and energy storage, and a foothold in Shandong's new energy storage infrastructure development.
