Capacity Planning - The second phase of the Quzhou base is nearly completed, with plans to establish a 587Ah battery production line next year [1] - The company’s small storage battery products range from 20-150Ah, with mainstream models being 50Ah and 100Ah [1] - The current production capacity for small storage products is at full capacity, with production scheduled until the first half of next year [2] Market Demand and Supply - The demand for small storage batteries is higher than for large storage batteries due to multiple regional demands in similar scenarios [2] - The company’s overseas large storage orders are increasing significantly compared to previous years, with major clients in North America, India, and Europe, each accounting for approximately one-third of the market [2] Product Development and Cost - The manufacturing cost of the 587Ah product is expected to decrease theoretically as capacity increases, although initial yield rates may be lower than the current mainstream 314Ah products [2] - The company anticipates that domestic growth next year will be similar to this year, while overseas growth is expected to accelerate [2] Material Management - The company employs different raw material procurement strategies based on market conditions and will engage in commodity hedging to manage price volatility risks [3]

Group 1: Market Analysis - On December 2, 2025, the main contract of lithium carbonate 2605 opened at 96,840 yuan/ton and closed at 96,560 yuan/ton, with a -0.72% change from the previous settlement price. The trading volume was 454,290 lots, and the open interest was 552,239 lots, compared to 543,633 lots the previous day. The basis was -2,240 yuan/ton, and the number of lithium carbonate warrants was 8,992 lots, a change of 770 lots from the previous trading day [1]. Group 2: Lithium Carbonate Spot Market - According to SMM data, the price of battery-grade lithium carbonate was 92,300 - 96,500 yuan/ton, a change of 50 yuan/ton from the previous day, and industrial-grade lithium carbonate was 90,800 - 93,100 yuan/ton, also a 50 yuan/ton change. The price of 6% lithium concentrate was 1,215 US dollars/ton, a -8 US dollars/ton change from the previous day. Downstream material factories mainly rely on long - term contracts and customer - supplied channels, and spot purchases are mainly for rigid demand, with light market transactions. Annual long - term contract negotiations between upstream and downstream enterprises are ongoing, focusing on next year's price coefficient and purchase volume. In December, domestic lithium carbonate production is expected to increase by about 3% month - on - month. In December, new energy vehicle sales are still good, and the energy storage market remains in a situation of strong supply and demand with a tight supply pattern. The production schedules of cells and cathode materials are expected to remain high in December, with a slight month - on - month decline. Overall, lithium carbonate will continue to be destocked in December, but at a slower pace than in November [2]. Group 3: BYD's Battery Business - On the evening of December 1, BYD released its production and sales report for November 2025. In November 2025, BYD's total installed capacity of new energy vehicle power batteries and energy storage batteries was about 27.669 GWh, an increase from 27.362 GWh in the previous month, a year - on - year increase of 23.13% and a month - on - month increase of 1.12%, breaking the second - highest historical record. From January to November 2025, BYD's cumulative installed capacity was about 258.282 GWh, a cumulative year - on - year increase of 50.9% [3]. Group 4: Strategy - In December, the destocking pace starts to slow down, but consumption has some support. Currently, the resumption of mining operations is in progress, and it is expected to resume within the year. There are significant differences in consumption forecasts for the first quarter. It is expected that the power battery segment will decline, while the energy storage segment will remain at a high level. Overall, consumption in the first quarter is expected to decline quarter - on - quarter, and there is a high possibility of lithium carbonate inventory accumulation. For single - side trading, it is advisable to wait and see in the short term [4].