Summary of Global Battery Materials Conference Call Industry Overview - The conference call focused on the **Global Battery Materials** industry, particularly the **Energy Storage System (ESS)** segment, which is experiencing a demand boom despite policy challenges [2][3][14]. Key Insights 1. **Demand Growth**: - ESS demand is projected to grow at a **33% CAGR from 2024 to 2030**, driven by an increasing share of renewable energy generation and improved project returns [3][16]. - ESS could surpass New Energy Vehicles (NEVs) as the largest demand driver for batteries in the long term [3][16]. 2. **Supply and Demand Rebalancing**: - The battery supply chain is expected to see improved utilization rates from **2025 to 2027**, leading to price increases and margin recovery [4][15]. - Price hikes for ESS cells have already been observed in **Q2 2025**, with expectations for continued increases into **Q3 2025** [4][16]. 3. **Competitive Landscape**: - Chinese battery manufacturers are gaining market share in the EU, while Korean companies, particularly **LG Energy Solution (LGES)**, are expected to benefit from US restrictions on Chinese supply chains [5][16]. - The early ramp-up of US-based capacity may allow Korean firms to reclaim market share in the US ESS market over time [5][16]. 4. **Investment Strategy**: - The investment strategy favors Chinese companies with higher ESS exposure and margin recovery potential over Korean players [6][20]. - Top investment picks include **CATL**, **EVE**, **CALB**, and **LGES**, while **EcoPro BM** and **Liontown Resources** are recommended as sells due to declining market positions [6][23][31][32]. 5. **Price Normalization**: - The normalization of battery prices is anticipated, with selective price hikes expected in materials such as cathodes, separators, and LiPF6 [4][16]. - The overall expectation is for modest price increases in battery materials during the upcoming upcycle [4][16]. Financial Projections - **CATL**: Target price raised to **Rmb 571/share** from **Rmb 404/share**, with expected sales volume growth of **31% in 2026** and **26% in 2027** [23]. - **EVE Energy**: Anticipated sales volume growth of **36% in 2026** and **27% in 2027**, with a significant portion of sales coming from ESS [24]. - **Hunan Yuneng**: Target price increased to **Rmb 57.90/share**, benefiting from strong LFP cathode demand and expected margin improvements [27]. Risks and Challenges - The industry faces risks from potential supply chain disruptions and the impact of US-China trade relations on market dynamics [5][41]. - Companies like **Samsung SDI** are rated neutral due to limited ESS capacity and near-term EV demand headwinds [41]. Conclusion - The global battery materials industry is poised for a recovery phase, with strong demand for ESS driving growth. Investment strategies are shifting towards companies with robust ESS exposure, while careful monitoring of competitive dynamics and market conditions is essential for navigating potential risks.