Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights strong demand for energy storage, with clear quarterly profit improvements [1] - The company's Q3 revenue reached 16.8 billion yuan, a year-on-year increase of 36%, while net profit attributable to shareholders was 1.21 billion yuan, up 15% quarter-on-quarter and 140% year-on-year [7] - The report anticipates a significant increase in battery shipments, projecting total shipments of 200 GWh in 2026, a growth of 60% [7] - The company is expected to benefit from rising prices in the energy storage sector, with profit margins projected to improve in Q4 2025 [7] Financial Forecasts - Total revenue is forecasted to reach 66.02 billion yuan in 2025, with a year-on-year growth of 35.80% [1] - Net profit attributable to shareholders is expected to be 4.51 billion yuan in 2025, reflecting a growth of 10.64% [1] - The report projects earnings per share (EPS) to be 2.20 yuan in 2025, with a price-to-earnings (P/E) ratio of 35.61 [1] - By 2026, revenue is expected to grow to 98.88 billion yuan, with net profit reaching 8.35 billion yuan, indicating an 85.11% increase [1] Market Data - The closing price of the company's stock is 78.49 yuan, with a market capitalization of approximately 160.57 billion yuan [5] - The company has a price-to-book (P/B) ratio of 4.17 and a total share capital of 2,045.73 million shares [5][6] Operational Insights - The company reported a stable gross margin in Q3 2025, with energy storage gross margin increasing by 2 percentage points [7] - The report indicates that the company is experiencing a supply-demand imbalance in its energy storage products, with production capacity expected to ramp up significantly in 2026 [7]

Core Viewpoint - The domestic lead market is experiencing a strong upward trend, with lead futures showing significant price movements and positive market sentiment driven by various factors including inventory levels and production rates [1][2][3] Group 1: Market Performance - On October 23, lead futures opened at 17,160.00 CNY/ton and reached a high of 17,760.00 CNY, marking a 3.12% increase [1] - The lead market is characterized by a strong performance, with expectations for continued upward movement in the short term [1] Group 2: Supply Dynamics - Lead ore port inventories have increased, while lead concentrate treatment charges (TC) have stabilized, maintaining high operating rates for primary lead smelting [1] - The supply of recycled lead is tightening, with a recovery in profits for recycled lead smelting, leading to increased weekly operating rates [1][2] - Domestic and foreign lead inventories are on the rise, indicating a slowdown in demand [2] Group 3: Demand Factors - Downstream lead-acid battery manufacturers are experiencing a decline in inventory levels, with battery factory stocks dropping to 19.7 days and dealer inventories to 39.7 days, alleviating pressure on finished goods [1] - Despite the traditional peak season for battery production, demand remains cautious, with a slow recovery observed in the overall market [2] - Emerging storage demand is showing positive trends, partially offsetting weaknesses in traditional demand sectors [2][3]

Core Viewpoint - Domestic energy storage demand has exceeded expectations this year, driven by the full market entry of renewable energy, which has widened the peak-valley electricity price difference, along with the introduction of capacity price policies that enhance energy storage IRR [1] Group 1: Energy Storage Demand - The driving force behind energy storage demand is shifting from mandatory renewable energy storage to economic drivers [1] - The overseas market, particularly outside the U.S., continues to experience rapid growth in demand [1] Group 2: Lithium Battery Sector - The increase in energy storage demand has led to a simultaneous rise in both volume and profit across the industry chain [1] - Citic Securities maintains a positive outlook on the energy storage and lithium battery sectors [1] Group 3: Future Expectations - The current key concern is whether the sustainability of energy storage demand can support an upward revision of the 20% growth expectation for 2026 [1] - Attention is drawn to the energy storage bidding in the fourth quarter, the expected battery procurement by the end of November, and the 2026 electric vehicle replacement policy along with lithium battery production plans [1]

Report Industry Investment Rating - Not provided Core View of the Report - The approaching traditional peak season for new energy vehicles and strong energy storage demand, along with the continuous reduction of lithium carbonate social inventory, support the futures price. However, the overall increase in production is the main factor suppressing the futures price. Attention should be paid to whether the market will take advantage of the supply - side issue again in the context of demand improvement and the reported environmental problems in Qinghai salt lakes [3] Summary by Relevant Catalogs Lithium Compounds - The average price of SMM battery - grade lithium carbonate is 73,850 yuan/ton, up 3,000 yuan/ton; the average price of SMM industrial - grade lithium carbonate is 71,600 yuan/ton, with no change [1] - The closing prices of lithium carbonate futures contracts (2510, 2511, 2512, 2601, 2602) are 72,680 yuan/ton (-0.66%), 72,880 yuan/ton (-0.79%), 72,900 yuan/ton (-0.87%), 72,860 yuan/ton (-0.79%), and 72,600 yuan/ton (-1.04%) respectively [1] Lithium Ore - The average price of lithium spodumene concentrate (CIF China) is 856 yuan/ton, down 4 yuan/ton; the average price of lithium mica (Li20: 1.5% - 2.0%) is 1140 yuan/ton, down 25 yuan/ton; the average price of lithium mica (Li20: 2.0% - 2.5%) is 1875 yuan/ton, down 25 yuan/ton; the average price of phospho - lithium - aluminum stone (Li20: 6% - 7%) is 6080 yuan/ton; the average price of phospho - lithium - aluminum stone (Li20: 7% - 8%) is 7210 yuan/ton, down 55 yuan/ton [1][2] Cathode Materials - The average price of lithium iron phosphate (power type) is 33,710 yuan/ton; the average prices of ternary materials 811 (polycrystalline/power type), 523 (single - crystal/power type), and 613 (single - crystal/power type) are 147,550 yuan/ton (up 100 yuan/ton), 120,450 yuan/ton (up 100 yuan/ton), and 125,100 yuan/ton (up 100 yuan/ton) respectively [2] Price Spreads - The price spread between battery - grade and industrial - grade lithium carbonate is 2250 yuan/ton; the price spread between battery - grade lithium carbonate and the main contract is 970 yuan/ton, up 780 yuan/ton; the price spreads between the near - month and the first - continuous contract, and the near - month and the second - continuous contract are - 200 yuan/ton (up 40 yuan/ton) and - 220 yuan/ton (up 40 yuan/ton) respectively [2] Inventory - The total inventory (weekly, tons) is 137,531 tons, down 981 tons; the inventory of smelters (weekly, tons) is 34,456 tons, down 1757 tons; the inventory of downstream (weekly, tons) is 59,495 tons, up 1216 tons; the inventory of others (weekly, tons) is 43,580 tons, down 440 tons; the registered warehouse receipts (daily, tons) is 39,749 tons, up 300 tons [2] Profit Estimation - The cash cost of purchasing lithium spodumene concentrate externally is 75,297 yuan/ton, with a profit of - 2,519 yuan/ton; the cash cost of purchasing lithium mica concentrate externally is not clearly given, with a profit of - 7,944 yuan/ton [3]

Report Summary 1. Investment Ratings There is no explicit overall industry investment rating provided in the report. However, individual product ratings are as follows: - **Bullish**: Gold, Silver, Palm Oil, Rapeseed Oil, Soybean Oil, Carbonate Lithium [1] - **Bearish**: Ethanol, Pig [1] - **Neutral (Oscillating)**: Stock Index, Treasury Bond, Copper, Aluminum, Alumina, Zinc, Nickel, Stainless Steel, Tin, Industrial Silicon, Rebar, Hot Rolled Coil, Iron Ore, Coke, Coking Coal, Cotton, Raw Sugar, Soybean Meal, Pulp, Log, Crude Oil, Fuel Oil, Shanghai Rubber, BR Rubber, PTA, Ethylene Glycol, Short Fiber, Styrene, PE, PVC, LPG, Container Shipping to Europe Line [1] 2. Core Views - **Macro - Financial**: The long - term outlook for stock indices is bullish, but the probability of a unilateral up - trend before the National Day holiday is low. Asset shortage and weak economy are favorable for bond futures, but the central bank has recently warned of interest rate risks [1]. - **Precious Metals**: A weaker US dollar boosts gold and silver prices, and they may perform strongly in the short term [1]. - **Non - Ferrous Metals**: While the Fed's interest rate cut has put pressure on copper and aluminum prices, factors such as overseas easing cycles, improved domestic downstream demand, and positive short - term sentiment are expected to stabilize copper prices. The decline in aluminum prices is limited due to the approaching consumption peak season. Alumina's fundamentals are weak, but its price is close to the cost line, so the downside is limited. Zinc prices are under pressure due to increasing social inventories. Nickel and stainless steel prices may oscillate in the short term, and attention should be paid to supply and policy changes. Tin may present low - buying opportunities during the peak demand season [1]. - **Black Metals**: The valuation of rebar and hot - rolled coil has returned to neutral, with unclear industrial drivers and positive macro - drivers. Iron ore has upward potential in the far - month contracts. Coke and coking coal prices are under pressure due to supply - demand imbalances. The supply of steel products is still excessive, and although there is marginal improvement in peak - season demand, prices are under pressure [1]. - **Agricultural Products**: Palm oil may be bought at the lower end of the oscillation range. Soybean oil is expected to reduce inventory in the fourth quarter and is bullish in the long - term. Rapeseed oil is recommended for buying and calendar spread trading. Domestic cotton prices may oscillate widely in the short term and face pressure in the long - term with the new cotton harvest. Raw sugar prices are rebounding but have limited upside due to oversupply. Soybean meal may oscillate in the short term [1]. - **Energy and Chemicals**: Crude oil prices have a slightly upward - moving center of gravity. PTA basis has declined rapidly, and ethylene glycol is bearish. Short - fiber and styrene may oscillate. PE, PVC, and LPG prices are under pressure, and the container shipping to Europe line may stop falling and stabilize [1]. 3. Summary by Product Category Macro - Financial - **Stock Index**: Long - term bullish, but low probability of unilateral up - trend before the National Day holiday, recommend controlling positions [1] - **Treasury Bond**: Asset shortage and weak economy are favorable, but central bank warns of interest rate risks, suppressing the upside [1] Precious Metals - **Gold**: A weaker US dollar boosts prices, expected to be strong in the short term [1] - **Silver**: Price rebounds driven by market sentiment, expected to be strong in the short term [1] Non - Ferrous Metals - **Copper**: Fed's interest rate cut puts pressure, but expected to stabilize due to overseas easing and domestic demand [1] - **Aluminum**: Interest rate cut causes pressure, but limited downside in the consumption peak season [1] - **Alumina**: Fundamentals are weak, but limited downside as price approaches cost line [1] - **Zinc**: Increasing social inventories put pressure on prices [1] - **Nickel**: May oscillate in the short term, focus on supply and macro changes [1] - **Stainless Steel**: May oscillate in the short term, recommend short - term trading and light positions for the holiday [1] - **Tin**: May present low - buying opportunities during the peak demand season [1] - **Industrial Silicon**: Market sentiment is bullish due to supply and policy expectations [1] Black Metals - **Rebar and Hot - Rolled Coil**: Valuation returns to neutral, industrial drivers are unclear, macro - drivers are positive [1] - **Iron Ore**: Near - month contracts are restricted by production cuts, far - month contracts have upward potential [1] - **Coke and Coking Coal**: Supply - demand imbalance, prices are under pressure [1] Agricultural Products - **Palm Oil**: Short - term oscillation adjustment, consider buying at the lower end of the range [1] - **Soybean Oil**: Expected to reduce inventory in the fourth quarter, long - term bullish [1] - **Rapeseed Oil**: Recommended for buying and calendar spread trading due to supply shortage and peak season [1] - **Cotton**: Short - term wide - range oscillation, long - term pressure with new cotton harvest [1] - **Raw Sugar**: Prices are rebounding but have limited upside due to oversupply [1] - **Soybean Meal**: May oscillate in the short term [1] Energy and Chemicals - **Crude Oil**: Price center of gravity moves slightly upward [1] - **Fuel Oil**: Follows the trend of crude oil in the short term [1] - **Shanghai Rubber**: Affected by typhoon and inventory changes [1] - **BR Rubber**: Pay attention to capital flow due to supply and spread changes [1] - **PTA**: Basis declines rapidly due to production recovery and other factors [1] - **Ethylene Glycol**: Bearish due to new production and hedging pressure [1] - **Short Fiber**: Factory production recovers, market delivery willingness weakens [1] - **Styrene**: Supply increases, may oscillate with limited upside and cost support [1] - **PE**: May oscillate weakly as the market returns to fundamentals [1] - **PVC**: Oscillates weakly due to supply pressure and high near - month warehouse receipts [1] - **LPG**: Upward momentum is restricted by production increase and high inventory [1] - **Container Shipping to Europe Line**: May stop falling and stabilize as prices approach cost [1]

Investment Rating - The investment rating for the industry is "Positive" (maintained) [4] Core Viewpoints - The acceleration of renewable energy subsidies is expected to significantly improve cash flow and valuation levels for companies in the renewable energy sector, particularly for new energy operators and biomass/waste incineration power generation companies [5][6][16] - The recent issuance of renewable energy subsidies has exceeded expectations, with the total amount received from January to August 2025 far surpassing the entire year of 2024, primarily due to a large subsidy disbursed in August [11][12] - The recovery of accounts receivable is anticipated to enhance cash flow and improve balance sheets, which will positively impact stock valuations in the Hong Kong market [6][16] Summary by Sections Renewable Energy Sector - The total subsidies received by renewable energy companies from January to August 2025 have already reached significant levels, with many companies receiving around 70% of their total subsidies in August alone [5][11] - Companies such as Datang New Energy, China Power, and Longyuan Power are recommended based on their potential for improved cash flow from receivables [6][16] Biomass and Waste Incineration Power Generation - The report highlights that biomass power generation companies are also expected to benefit from the subsidy disbursement, with companies like China Everbright Environment and Shaoneng Co. being recommended for their potential higher dividend capabilities post-receivable recovery [6][16] Energy Storage Sector - The average price of square lithium iron phosphate energy storage cells has seen a slight increase, with domestic demand remaining strong and production capacity utilization rates high [7][18] - The domestic new energy storage project bidding scale reached 56.1GW/213.8GWh from January to July 2025, indicating a year-on-year growth of 181% [19] - The report suggests that companies like CATL, Yiwei Lithium Energy, and Guoxuan High-Tech are worth watching due to their expected performance elasticity amid rising energy storage cell prices [18][19]

Summary of Key Points from Conference Call Records Industry Overview - The lithium battery industry is expected to enter a new growth cycle by the end of this year or early next year, with potential supply tightness and price recovery during the peak season next year, driven by strong domestic and international demand in the energy storage market [1][3] - The overall supply in the battery cell industry has decreased, with slower growth in photovoltaic energy storage and wind power segments, while the power equipment sector is expanding rapidly [1][4] Company Recommendations - Recommended companies include Sungrow Power Supply, EVE Energy, DeYuan Co., and Haibo Sichuang, which have recently published in-depth reports detailing their fundamentals [1][5] Demand Projections - Lithium battery demand is expected to remain strong in 2026, with the automotive market projected to grow by approximately 16% and the energy storage market exceeding 20% growth [1][6][8] - The European market is anticipated to grow at around 20% due to subsidies and carbon emission policies, while the U.S. market may see a decline offset by new model introductions [1][7] Supply and Pricing Dynamics - The weakest supply-demand situation in the lithium battery industry is expected in Q1 2025, with capacity utilization around 70%, rising to 80% in Q3/Q4, potentially leading to a price surge [1][9] - Lithium hexafluorophosphate is currently the tightest supply chain link, with expected price increases due to energy storage demand [1][12] Performance of Specific Companies - EVE Energy is highlighted for its significant performance elasticity, with conservative estimates of 7.9 billion yuan in overall performance next year, driven by both power battery and energy storage business contributions [1][10] - Haibo Sichuang's shipment volume is expected to reach 70 GWh next year, with a projected profit of 1.6 to 1.8 billion yuan [1][18][19] - Sungrow's inverter business is performing as expected, with stable profitability and growth in line with photovoltaic demand [1][20] Energy Storage Market Insights - The energy storage industry is characterized by strong current realities and weak expectations, with increasing domestic bidding volumes and high realization rates for EPC projects [2][13] - Local and private enterprises are actively investing in independent energy storage projects, supported by capacity pricing or compensation policies [2][14] Future Outlook - The energy storage industry is expected to grow by over 30% in 2026, with the company’s shipment volume anticipated to align with industry growth [1][24] - DeYuan's industrial and household storage business is showing rapid growth, with expected profits close to 3.4 billion yuan this year [1][26][27] Conclusion - The lithium battery and energy storage sectors are poised for significant growth, driven by strong demand, strategic investments, and favorable market conditions, with specific companies showing promising performance and resilience in the face of market fluctuations [1][8][24]

Summary of Key Points from the Conference Call Industry Overview - The global energy storage market is experiencing significant growth, with total shipments exceeding 300 GWh from January to July 2025, which is 2.1 times that of the same period last year, surpassing initial forecasts [1][2] - The energy structure is shifting from coal and gas to wind and solar, leading to improved economic viability for energy storage solutions [1][4] - The market is expected to maintain long-term growth, driven by new pricing mechanisms that lower marginal costs of basic electricity [1][4] Market Trends and Projections - In Europe, the commercial energy storage ratio is currently low, with expectations for installed capacity to reach 5 GWh by 2025, doubling year-on-year, and potentially reaching 20 GWh by 2029, with a compound annual growth rate (CAGR) exceeding 50% [1][7] - The demand for solar plus storage solutions is high in regions with weak grid infrastructure, such as Africa and Latin America, where household storage systems can reduce electricity costs [1][8] - The Asia-Pacific region, particularly countries like Pakistan, Iraq, and Syria, shows strong demand for energy storage due to frequent power outages [1][8] Investment Opportunities - Short-term investment opportunities include companies expanding into international markets (Europe, Latin America, Africa, Southeast Asia, and the Middle East), those focusing on technology development, and firms deepening their presence in niche markets [1][5] - Companies like 德业股份 (Deye) and 艾罗能源 (Aero Energy) are highlighted for their strong market positions and growth potential, particularly in the European market [10][12] Competitive Landscape - The competitive landscape among energy storage companies is shifting towards product innovation and market expansion, with companies like 德业股份 capturing significant market share in Africa and Latin America [9] - The introduction of new products, such as high-capacity storage systems, is enhancing competitiveness and meeting the growing demand in emerging markets [9][10] Financial Performance and Valuation - Companies in the energy storage sector are showing improved financial performance, with significant revenue growth and profit recovery expected in the second half of 2025 [2][21] - The valuation of leading energy storage companies remains relatively low, attracting investor interest amid high market demand [21][22] Future Outlook - The global energy storage market is projected to exceed 450 GWh in shipments for 2025, with sustained growth driven by both developing and developed countries [24] - The long-term outlook for the energy storage market is optimistic, with expectations for continued demand growth and profitability [24]

Group 1 - The carbon-neutral ETF Taikang (560560) experienced a strong performance, with a peak increase of over 3% and a current rise of 1.72%, reflecting a robust market interest in low-carbon investments [1] - The underlying index, the CSI Mainland Low-Carbon Economy Theme Index (000977), also showed significant growth, up 1.02%, with key constituent stocks like Weikang (300919) and JA Solar (002459) rising by 10.04% and 10.00% respectively [1] - Over the past week, the carbon-neutral ETF Taikang (560560) has accumulated a rise of 6.30%, reaching a new high in scale at 70.25 million yuan [1] Group 2 - The demand for energy storage is on the rise globally, with various regions implementing supportive policies, such as China's "Document No. 136," which clarifies capacity pricing and subsidies [2] - In Europe, dynamic pricing mechanisms and increased subsidies are driving significant growth in large-scale and commercial energy storage [2] - The share of independent energy storage projects in China is rapidly increasing, with a focus on lifecycle costs and efficiency rather than just initial pricing, indicating a shift in market dynamics [2] Group 3 - The top ten weighted stocks in the carbon-neutral ETF Taikang (560560) are heavily involved in the energy storage sector, with companies like CATL leading in global energy storage battery shipments [3] - These companies are expanding their operations internationally, contributing to the growth of the domestic energy storage industry and enhancing global market presence [3] - The CSI Mainland Low-Carbon Economy Theme Index tracks 50 core enterprises in the low-carbon economy, covering the entire industry chain from clean energy generation to storage and waste management [3]

Group 1 - The price of lithium carbonate has surged significantly, with the average spot price for battery-grade lithium carbonate rising from 78,000 yuan/ton to 82,000 yuan/ton, marking a weekly increase of 11,800 yuan/ton, the largest weekly increase this year [1][3] - The prices of lithium iron phosphate have also increased, with the average price for power-type lithium iron phosphate rising from 33,250 yuan/ton to 35,350 yuan/ton, and the average price for energy storage-type lithium iron phosphate increasing from 30,900 yuan/ton to 32,900 yuan/ton, resulting in weekly increases of 2,100 yuan/ton and 2,000 yuan/ton respectively [1][3] - The surge in lithium carbonate prices is primarily driven by the suspension of mining operations in Jiangxi due to expired mining licenses, which is expected to reduce the monthly supply of lithium carbonate equivalent by 8,300 tons, accounting for 8.5% of the national total production [3] Group 2 - Despite the traditional off-season for the electric vehicle market, demand in the energy storage sector continues to grow, supporting the price increase of lithium iron phosphate [3] - The installed capacity of new energy storage is expected to grow by 160% year-on-year in the first half of 2025, leading to a surge in demand for high-density lithium iron phosphate materials, with some companies extending their order schedules into the first quarter of 2026 [3] - Analysts indicate that the tight supply of lithium carbonate is unlikely to ease in the short term, and with the peak demand season for energy storage approaching, prices for lithium carbonate and lithium iron phosphate are expected to remain high [3]