Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The report highlights a significant growth in the European electric vehicle (EV) market, with September 2025 sales reaching 307,000 units, a year-on-year increase of 34.7% [5][14] - The penetration rate of new energy vehicles in Europe has risen to 31.8%, up by 5.8 percentage points year-on-year [14] - The report emphasizes the ongoing support from government policies and subsidies across various European countries, which are expected to sustain demand for electric vehicles [15][41] Summary by Sections Electric Vehicle Sales - In September 2025, the sales of new energy vehicles in nine European countries reached 307,000 units, representing a year-on-year growth of 34.7% [5][14] - The breakdown includes 198,000 battery electric vehicles (BEV), up 22.8% year-on-year, and 108,000 plug-in hybrid electric vehicles (PHEV), which saw a remarkable increase of 63.6% [14] Country-Specific Insights - **Germany**: BEV sales reached 45,000 units in September, a year-on-year increase of 31.9%, with a penetration rate of 19.3% [16] - **United Kingdom**: BEV sales were 73,000 units, up 29.1% year-on-year, with approximately 25% of BEV models qualifying for subsidies [19] - **France**: BEV sales reached 31,000 units, a 12.8% increase year-on-year, with the highest market share of 22.3% [22] - **Italy**: PHEV sales surged by 165.8% year-on-year, with a total of 11,000 units sold [33] - **Spain**: BEV sales increased by 59.7% year-on-year, driven by new model launches and promotional activities [37] Investment Recommendations - The report recommends investments in lithium battery companies such as CATL, Yiwei Lithium Energy, and Xinwangda, as well as in lithium materials and structural components [41] - Specific beneficiary stocks include Hunan Youneng, Fu Lin Precision, and others across various segments of the electric vehicle supply chain [41][42]

Group 1 - The core viewpoint is that the energy storage battery sector is experiencing significant growth, driven by new policies and market dynamics [2][3] - Energy storage battery concept stocks saw a rise in early trading, with notable increases in shares of Yangguang Electric (over 7%), Yiwei Lithium Energy (over 4%), and others [1] - The energy storage ETF also increased by approximately 2%, reflecting positive market sentiment [1] Group 2 - Analysts believe that the release of the "Document 136" at the beginning of the year marked a turning point for the energy storage industry, leading to improved profitability and demand growth [2] - The introduction of new profit models, such as capacity pricing and peak-valley arbitrage, has significantly enhanced the profitability of energy storage projects [2] - The recent planning of energy storage projects in Hebei province further strengthens the expectation of an upward trend in the industry next year [2]

Core Viewpoint - EVE Energy has experienced significant stock price fluctuations, with an 80.16% increase year-to-date, but a recent decline of 8.20% over the last five trading days [2] Group 1: Stock Performance - As of October 16, EVE Energy's stock price rose by 2.02% to 82.87 CNY per share, with a trading volume of 1.381 billion CNY and a turnover rate of 0.91% [1] - The stock has seen a 30.06% year-on-year increase in revenue for the first half of 2025, amounting to 28.17 billion CNY, while net profit decreased by 24.90% to 1.605 billion CNY [2] Group 2: Business Overview - EVE Energy, established on December 24, 2001, specializes in the research, production, and sales of consumer batteries and power batteries, with a revenue composition of 45.26% from power batteries, 36.56% from energy storage batteries, and 18.03% from consumer batteries [2] - The company is categorized under the electric equipment industry, specifically in the battery sector, and is involved in various concepts such as tire pressure monitoring and solid-state batteries [2] Group 3: Shareholder Information - As of June 30, 2025, EVE Energy had 139,700 shareholders, a decrease of 1.97% from the previous period, with an average of 13,326 circulating shares per shareholder, an increase of 2.01% [2] - The top ten circulating shareholders include Hong Kong Central Clearing Limited and E Fund's various ETFs, with notable changes in their holdings [3]

Investment Rating - The report maintains an "Overweight" rating for the lithium battery industry, expecting the industry index to outperform the market index by over 10% in the next six months [5]. Core Insights - In September 2025, the production and sales of new energy vehicles (NEVs) reached historical highs, with production and sales of 1.617 million and 1.604 million units respectively, representing year-on-year growth of 23.7% and 24.6%, and month-on-month growth of 16.25% and 14.98% [4]. - The penetration rate of NEVs in September was 49.7%, up 0.9 percentage points month-on-month, while the year-to-date penetration rate was 46.1% [4]. - Battery sales also saw significant growth, with total battery production reaching 151.2 GWh in September, a month-on-month increase of 8.3% and a year-on-year increase of 35.4% [4]. - The report highlights strong demand for energy storage in both domestic and international markets, with leading battery companies operating at full capacity [4]. Summary by Sections New Energy Vehicle Market - In September 2025, NEV sales reached 1.604 million units, with pure electric vehicle sales at 1.058 million units, showing a year-on-year increase of 36.4% [4]. - Year-to-date NEV sales totaled 11.224 million units, with pure electric vehicles accounting for 7.22 million units, reflecting a year-on-year growth of 44.7% [4]. Battery Production and Sales - In September, the total battery sales were 146.5 GWh, with power batteries accounting for 110.5 GWh, representing 75.5% of total sales [4]. - The report notes that the export of batteries in September was 26.7 GWh, with power batteries making up 17.6 GWh of that total [4]. Investment Recommendations - The report suggests focusing on leading companies in the lithium battery supply chain, particularly those with technological and production advantages in solid-state electrolytes and new materials [4]. - Key companies to watch include CATL, EVE Energy, and others that are actively developing solid-state battery technologies [4].

Core Insights - The article highlights the continuous growth of China's power battery and other battery industries in the first three quarters of 2025, with significant increases in production, sales, and exports [4][14][26]. Production and Sales - In the first three quarters of 2025, the production and sales of power and other batteries reached 1121.9 GWh and 1067.2 GWh, respectively, representing year-on-year growth of 51.4% and 55.8% [4]. - In September 2025, the total production of power and other batteries was 151.2 GWh, with a month-on-month increase of 8.3% and a year-on-year increase of 35.4% [9][12]. - The cumulative sales of power and other batteries from January to September 2025 reached 1067.2 GWh, with a year-on-year growth of 55.8% [14]. Export Performance - Cumulative exports of power and other batteries in the first three quarters of 2025 amounted to 199.9 GWh, reflecting a year-on-year increase of 45.5% [4][26]. - In September 2025, the export volume of power batteries was 17.6 GWh, with a year-on-year growth of 50.9% [27][40]. Market Segmentation - In September 2025, the share of pure electric trucks in the total installation volume reached 16.0%, showing a significant year-on-year increase of 156.5% [4]. - The cumulative installation volume of power batteries from January to September 2025 was 493.9 GWh, with a year-on-year growth of 42.5% [47]. Material Types - In September 2025, the production of lithium iron phosphate batteries accounted for 79.0% of the total battery production, with a year-on-year increase of 65.4% [9]. - The sales of power batteries in September 2025 reached 110.5 GWh, with a year-on-year growth of 44.4% [20]. Company Rankings - In September 2025, the top ten companies in power battery sales included CATL, BYD, and others, with significant year-on-year growth rates [32][34]. - The cumulative sales of power batteries from January to September 2025 showed that CATL and BYD maintained their leading positions in the market [39]. Installation Concentration - In September 2025, the top two companies accounted for 63.8% of the total installation volume, indicating a slight decrease in market concentration compared to the previous year [62]. - The average installation volume per vehicle in September 2025 was 55.0 kWh, reflecting a month-on-month increase of 2.0% [63].

Core Viewpoint - The A-share market is experiencing a collective rise, with the ChiNext 50 ETF increasing by 2.75% and a net subscription of 1.43 billion yuan over the past 10 days, indicating a positive market sentiment and potential for a "slow bull" trend in the long term [1][2]. Group 1: Market Trends - Long-term revaluation of Chinese assets is anticipated, with short-term fluctuations not altering the overall positive trend [1]. - The market is expected to maintain an upward trajectory, with core trends remaining intact despite short-term external shocks [2]. Group 2: Investment Strategies - In the technology growth sector, there is a continued focus on AI computing power, innovative pharmaceuticals in Hong Kong, and military industry, with increased attention on AI applications and internet sectors at relatively low levels [1]. - Value investment strategies should focus on sectors benefiting from improved supply-demand dynamics, particularly in metals, transportation, chemicals, lithium batteries, photovoltaics, and pig farming [1]. - The growth style is likely to transition from valuation-driven to performance-driven, with significant opportunities expected in late October to early November [1][2]. Group 3: Fund Performance - The Huazhang ChiNext 50 ETF has achieved a return of 38.38% since its inception, with a year-to-date return of 44.15% and a one-year return of 43.79% [2]. - The fund's manager, Xu Zhiyan, has delivered a return of 44.35% during his tenure since June 1, 2016 [2].

Group 1 - The meeting between the Chinese Ministry of Industry and Apple CEO Tim Cook focused on Apple's business development in China and enhancing cooperation in the electronic information sector [1] - The Chinese official emphasized the vast investment and consumption potential of China's large-scale market and complete industrial system, committing to high-level opening-up and creating a favorable business environment for foreign companies like Apple [1] - Tim Cook expressed gratitude for the support from the Ministry and announced plans to increase investment in China, aiming for mutually beneficial development [1] Group 2 - As of October 15, 2025, the CSI Consumer Electronics Theme Index (931494) rose by 1.18%, with notable increases in component stocks such as Xinxin Precision (8.03%) and Shengyi Technology (7.48%) [1] - The CSI Consumer Electronics Theme Index includes 50 listed companies involved in component production and consumer electronics, with the top ten stocks accounting for 55.93% of the index [2] - The top ten weighted stocks in the index include Luxshare Precision (8.06%), SMIC (8.04%), and BOE Technology (6.71%) [4]

Group 1: ETF Performance - The New Energy ETF has seen a turnover rate of 3.23% with a transaction volume of 45.82 million yuan [3] - Over the past month, the New Energy ETF's scale has increased by 279 million yuan, indicating significant growth [3] - In the past week, the ETF's shares grew by 299 million shares, ranking first among comparable funds [3] - The latest net inflow of funds into the New Energy ETF is 12.93 million yuan, with a total of 200 million yuan net inflow over the last four trading days [3] - As of October 14, the New Energy ETF's net value has risen by 55.85% over the past six months, ranking 237 out of 3739 index equity funds, placing it in the top 6.34% [3] - Since its inception, the ETF has achieved a maximum monthly return of 25.07%, with the longest consecutive monthly gains lasting five months and a maximum increase of 62.44% [3] Group 2: Policy and Market Trends - The "Central Budget Investment Special Management Measures for Energy Conservation and Carbon Reduction" has been issued, supporting energy conservation and carbon reduction projects in key industries such as electricity, steel, non-ferrous metals, building materials, petrochemicals, chemicals, and machinery [3] - The new policy encourages energy conservation and carbon reduction transformations in industrial parks and clusters, as well as in infrastructure such as heating and computing power [3] Group 3: Energy Storage Developments - According to the National Energy Administration, by the end of 2024, the cumulative installed capacity of new energy storage projects in China is expected to reach 73.76 million kilowatts, which is approximately 20 times that of the end of the 13th Five-Year Plan, with a growth of over 130% compared to the end of 2023 [4] - The average storage duration is reported to be 2.3 hours, indicating advancements in energy storage capabilities [4] - The implementation of Document No. 136 marks the entry of new energy into a market-oriented trading era, enhancing the economic viability of energy storage [4] Group 4: Stock Performance - As of September 30, 2025, the top ten weighted stocks in the China Securities New Energy Index include CATL, Sungrow Power, EVE Energy, Longi Green Energy, Huayou Cobalt, TBEA, China Nuclear Power, Ganfeng Lithium, Lead Intelligent, and Three Gorges Energy, collectively accounting for 45.2% of the index [6]

Core Viewpoint - The article discusses the performance of the Chuangye 50 ETF (159682) as of October 15, highlighting its current price, trading volume, and the performance of its major holdings [1] Group 1: ETF Performance - As of the midday close, the Chuangye 50 ETF (159682) increased by 0.15%, reaching a price of 1.346 yuan, with a trading volume of 2.27 billion yuan [1] - Since its inception on December 23, 2022, the fund has achieved a return of 34.38%, while its return over the past month has been -2.15% [1] Group 2: Major Holdings Performance - Key stocks within the Chuangye 50 ETF include: - Ningde Times increased by 0.18% - Dongfang Fortune rose by 0.32% - Huichuan Technology saw a slight increase of 0.01% - Zhongji Xuchuang decreased by 0.17% - Mindray Medical fell by 0.11% - Xinyi Sheng increased by 0.13% - Sunshine Power surged by 2.64% - Shenghong Technology rose significantly by 4.55% - Yiwei Lithium Energy dropped by 0.63% - Tonghuashun decreased by 0.40% [1]

Summary of Key Takeaways from ZE Conference on Battery Value Chain Industry Overview - **Industry Focus**: Battery materials, specifically related to Energy Storage Systems (ESS) and Electric Vehicle (EV) batteries - **Key Participants**: ZE Consulting, China Futures, and various industry contacts Core Insights - **ESS Demand Growth**: - Industry consensus indicates a rising demand for ESS batteries to compensate for slowing EV battery demand in 2026 - Demand growth forecasts for 2026 vary significantly among experts, ranging from **18% YoY** (China Futures) to **40% YoY** (ZE) [1][2] - ZE predicts global ESS production will reach **1000 GWh** in 2026, up from **600 GWh** in 2025, representing a **60%+ YoY growth** [1][2] - **Lithium Carbonate Demand**: - If ZE's forecast holds, it implies an incremental demand of **500 kt+** for lithium carbonate, potentially leading to a quicker turnaround in lithium supply-demand dynamics [2] - Experts see limited downside risk for lithium average selling prices (ASP), although policy uncertainties regarding mining licenses may introduce volatility [2] - **LFP Cathode Utilization**: - Expected increase in utilization rates for LFP cathodes by **8 percentage points YoY** in 2026, with a range of **70%-80%** [3] - Current loss-making status among LFP cathode manufacturers is deemed unsustainable, with potential for a deficit in 2027 if demand growth continues to outpace supply [5] Investment Implications - **Positive Outlook**: The overall positive sentiment from the ZE Conference aligns with a bullish outlook on the upcoming battery price up-cycle [6] - **Investment Recommendations**: - Continued support for companies such as **CATL**, **EVE**, **CALB**, and **Hunan Yuneng** is suggested based on strong demand forecasts and production pipelines [6] Risks to Consider - **Key Risks**: - Weaker-than-expected battery demand - Research and development challenges - Strong competition and operational execution issues - Customer concentration and litigation risks [8][10][14][16] Company Valuations - **CALB Group Co Ltd**: Target price set at **HK$33.40**, based on a **2026E P/E of 20.6x** [7] - **CATL**: Valued at **HK$621/share** based on a **17.3x 2025E EV/EBITDA** [9][11] - **Eve Energy**: Target price of **Rmb93.9/share**, using a sum-of-the-parts approach [12] - **Hunan Yuneng**: Valued at **Rmb57.9/share** based on a **14.4x 2026E EV/EBITDA** [15] Conclusion - The battery materials industry is poised for significant growth, particularly in the ESS segment, with varying demand forecasts indicating a robust market. However, potential risks and challenges remain that could impact the overall outlook and company valuations.