CATL(SZ:300750) Ge Long Hui A P P·2025-11-11 09:13Core Viewpoint - The lithium battery energy storage sector is experiencing a significant surge, driven by policy support, market demand, and rising prices, indicating the onset of a new super cycle in the industry [1][4][17]. Policy Support - Recent policies from the National Development and Reform Commission and the National Energy Administration promote energy storage projects, allowing them to generate stable income through grid services, enhancing profitability [2][4]. - The internal rate of return (IRR) for energy storage projects has increased from 5%-6% to 8%-10%, with some regions reaching up to 12% due to favorable compensation standards [2][3]. Demand Explosion - The demand for energy storage is surging globally, with domestic projects in China increasing by over 100% year-on-year, and overseas orders for Chinese energy storage companies rising by 246% [5][6]. - AI data centers are emerging as significant customers for energy storage solutions, with large orders being placed to ensure reliable power supply [5][6]. Price Increases in Materials - The prices of key materials such as lithium hexafluorophosphate (6F) and electrolyte additives are rising due to increased demand and supply constraints, with 6F prices increasing by 50% from their previous lows [7][8][9]. - The production of electrolytes has seen a significant increase, with a 43.67% year-on-year growth in the first nine months of the year, indicating strong market demand [6][11]. Key Companies and Segments - Companies involved in energy storage systems and power conversion systems (PCS) are benefiting from the surge in global orders, with notable players like Sungrow Power and Huaneng Renewables leading the market [13][14]. - Leading battery manufacturers such as CATL and EVE Energy are positioned well to capitalize on the growing demand for energy storage cells, with their production capacities fully utilized [15][16]. - Material producers are also set to benefit from price increases, with companies like Tianqi Lithium and Huayou Cobalt expected to see significant profit growth due to their cost advantages and market positions [12][16]. Summary - The lithium battery energy storage sector is at the beginning of a super cycle, driven by strong policy support, robust demand, and rising material prices, with various segments of the industry poised for growth [17][18].