Investment Rating - The report maintains an "Overweight" rating for the electric power equipment and new energy sector [6] Core Viewpoints - The global electrification trend is accelerating, with domestic battery manufacturers establishing significant advantages in the new energy vehicle and energy storage markets [1][15] - Domestic battery manufacturers are rapidly increasing their global market share, with companies like CATL and BYD leading the way [2][20] - The report highlights the competitive edge of domestic lithium iron phosphate batteries and the ongoing catch-up in solid-state battery commercialization compared to overseas counterparts [3][18] - Overseas battery manufacturers are heavily reliant on the Chinese supply chain, and potential declines in subsidies may pressure their profitability [4][34] - Despite concerns over tightening trade policies, the report suggests that the impact on domestic battery manufacturers' export shares may be limited [5][16] Summary by Sections Global Market Dynamics - Domestic battery manufacturers are expanding globally, with CATL's overseas market share rising from 14.0% in 2021 to 27.0% in 2024, surpassing LG [24] - BYD's overseas market share has also increased significantly, from 0.4% in 2021 to 4.1% in 2024 [24] Competitive Landscape - The report notes that domestic battery manufacturers have a higher degree of vertical integration in the lithium battery supply chain, allowing them to replace traditional joint venture brands rapidly [2][15] - The compound annual growth rate (CAGR) for CATL and BYD's power battery installations from 2021 to 2024 is projected at 77.7% and 103.2%, respectively, outpacing overseas manufacturers [2][18] Technological Advancements - Domestic manufacturers are expected to maintain their lead in lithium iron phosphate technology, while overseas manufacturers are still ramping up production [3][30] - The report emphasizes the importance of solid-state battery technology, with domestic firms potentially narrowing the technological gap through innovative approaches [3][18] Financial Performance - CATL's operating profit margin is higher than that of its overseas counterparts, and its conservative financial practices provide additional room for profit release [4][34] - The report indicates that CATL's revenue reached 362.01 billion yuan, maintaining its position as the leading global battery manufacturer [34] Future Outlook - The report is optimistic about the continued global expansion of domestic battery manufacturers, particularly CATL, which is expected to further increase its market share [1][15] - The ongoing electrification revolution is anticipated to sustain high demand growth for lithium batteries, supported by the expansion of electrochemical energy storage and new applications [14][15]