Investment Rating - The report rates the industry as "Outperform" [3] Core Insights - The report highlights the rapid expansion of lithium battery applications across various sectors, including electric two-wheelers, low-altitude economy, robotics, and RVs, with a projected CAGR of 18.08% from 2025 to 2030 for industrial and consumer drones [3] - It emphasizes the strong growth in energy storage and power batteries, driven by new application scenarios, with energy storage battery demand expected to reach 1384.00 GWh by 2028, reflecting a CAGR of 39.07% from 2024 to 2028 [3] - The report notes the increasing concentration of resources towards leading companies, with second-tier firms seeking differentiated competition [3] Summary by Sections 1. Lithium-ion Batteries - Lithium batteries convert chemical energy to electrical energy through electrochemical reactions, involving the movement of lithium ions between the anode and cathode [9] - Lithium-ion batteries dominate the market, accounting for 67% of the global secondary battery market share in 2025, with a projected CAGR of 22.13% from 2024 to 2030 [12][16] - The lithium battery supply chain includes upstream resource extraction, midstream cell manufacturing, and downstream applications and recycling [9] 2. Demand - Global battery demand is expected to grow significantly, with total shipments projected to reach 4377.54 GWh by 2028, representing a CAGR of 28.91% from 2024 to 2028 [19] - Energy storage batteries are anticipated to see a substantial increase, with a projected shipment of 1384.00 GWh by 2028 [19] - The demand for power batteries is driven by the electrification of commercial vehicles and engineering machinery, with a forecasted shipment of 2859.62 GWh by 2028 [20] 3. Market Structure - The report indicates that the battery materials sector has the highest technical barriers and cost proportions, with cathode materials accounting for 51% of total battery costs [52] - The competitive landscape shows a stable market share among leading power battery companies, while the second-tier firms are experiencing rapid growth [3] - The report highlights the increasing concentration in the separator market, with leading companies benefiting from cost control and technological upgrades [3] 4. Investment Themes - The report suggests focusing on new application scenarios and technological advancements, particularly in solid-state battery industrialization led by major players [3] - It emphasizes the importance of price recovery and profitability improvement in the battery industry, with cell prices rebounding since 2025 [3] - The report provides a valuation summary of battery industry companies, indicating potential investment opportunities [3]

Core Viewpoint - The A-share market has shown a significant upward trend, particularly in the new energy sector, driven by favorable policies and advancements in solid-state battery technology [1][2]. Market Performance - As of September 24, 2025, the three major A-share indices rose collectively, with the Shanghai Composite Index increasing by 0.77%, the Shenzhen Component Index by 1.55%, and the ChiNext Index by 2.05% [1]. - The ChiNext New Energy ETF (Hua Xia, 159368) surged by 3.58%, with its constituent stocks such as Maiwei Co., Huabao New Energy, and Sunshine Power leading the gains, each rising over 7% [1]. - Over the past five trading days, the ChiNext New Energy ETF attracted 293 million yuan, and 550 million yuan over the last ten days, indicating strong investor interest [1]. Policy Developments - Recent policies have favored solid-state batteries, with the National Energy Administration and other ministries releasing guidelines that prioritize the development of long-life, wide-temperature range, low-degradation lithium and sodium batteries, as well as solid-state battery technologies [1]. - The Ministry of Industry and Information Technology and other departments have introduced an action plan for the high-quality development of new energy storage manufacturing, aiming for small-scale production of all-solid-state batteries by 2027 [1]. Industry Insights - Huaxi Securities highlighted that the upgrade and iteration of battery technology are crucial for expanding terminal demand, with solid-state batteries emerging as a definitive next-generation battery technology due to their high energy density and safety [2]. - The ChiNext New Energy ETF (Hua Xia, 159368) is the first ETF in the market tracking the ChiNext New Energy Index, featuring the largest scale at 824 million yuan and the highest trading volume with an average daily turnover of 60.31 million yuan over the past month [2]. - The ETF has a storage content of 51% and a solid-state battery content of 23.6%, aligning well with current market trends [2].

Group 1 - The solid-state battery industry is experiencing dual drivers from policy and technology, with the Ministry of Industry and Information Technology including all-solid-state batteries in the new industrial standard system, accelerating technological iteration and industrialization [1] - Solid-state batteries offer high energy density (semi-solid 350-400Wh/kg, all-solid over 500Wh/kg) and high safety advantages, with applications expanding in new energy vehicles, consumer electronics, and low-altitude economy [1] - It is expected that the global penetration rate of solid-state batteries will reach 3% (76GWh) by 2027 and increase to 8% (271GWh) by 2030, with a compound annual growth rate of 92% from 2024 to 2030 [1] Group 2 - In the industry chain, sulfide solid electrolytes are becoming the mainstream route for all-solid-state batteries, although current costs are high (hundreds of thousands of yuan per ton) [1] - Silicon-based anodes are seen as a medium-term solution, with production capacity expected to be released in 2025 [1] - The equipment sector is expected to see incremental space due to new process demands such as dry electrode and isostatic pressing [1] Group 3 - The mechanical ETF tracks a segmented mechanical index compiled by China Securities Index Co., Ltd., selecting listed company securities from the Shanghai and Shenzhen markets involved in engineering machinery and industrial robots to reflect the overall performance of quality enterprises in the mechanical equipment industry [1] - This index has strong industry representativeness and is suitable for investors focusing on the development of the mechanical equipment industry [1]

Core Viewpoint - The solid-state battery has emerged as a crucial direction in the new round of technological competition in the electric vehicle industry, with significant advancements in research and development accelerating the industrialization process [1][2]. Industry Developments - The solid-state battery is expected to drive a new round of technological upgrades in the lithium battery industry, showcasing significant advantages in energy density and safety compared to liquid batteries [2]. - The solid-state battery industry chain is developing rapidly, with breakthroughs in materials such as solid electrolytes, silicon-carbon anodes, and new cathode preparation processes [2]. - Major automotive companies are planning to launch new models equipped with solid-state batteries, indicating a strong market interest [2]. Policy and Standards - The release of the "Full Solid-State Battery Determination Method" and the upcoming new national standards for power batteries by the Ministry of Industry and Information Technology in April 2025 will impose stricter requirements on battery thermal runaway and diffusion [2]. - National policies are showing a positive encouragement trend towards the solid-state battery industry, aiming to accelerate its top-level construction [2]. Market Dynamics - The solid-state battery industry is influenced by a combination of market demand, policy encouragement, and industrial upgrades, which are expected to facilitate a new round of technological iterations in the lithium battery sector [2].