Summary of Gotion High Tech (002074.SZ) 2026 Business Outlook Call Company Overview - **Company**: Gotion High Tech - **Industry**: Battery manufacturing, specifically focusing on electric vehicle (EV) and energy storage systems (ESS) Key Takeaways Battery Capacity - Effective battery capacity was approximately **150 GWh** at the end of 2025, which includes over **30 GWh** of ESS battery capacity - Management expects effective capacity to exceed **200 GWh** by the end of 2026, with around **60 GWh** allocated for ESS [1][2] Cost Management - Lithium costs are included in the cost pass-through pricing mechanism for both EV and ESS batteries - Gotion is negotiating to include costs of electrolyte, LiPF6, and copper in the pricing mechanism - The company has achieved a **100% self-sufficiency ratio** for LFP cathodes, with a production capacity of **200-300 ktpa** [3] Lithium Production - Gotion's lithium output was less than **10 kt** in 2025, with expectations to reach over **10 kt** in 2026, contingent on lithium prices - Current lithium cost is approximately **Rmb 70,000/t**, including VAT [4] International Expansion - A **5 GWh** battery capacity facility in Vietnam is operational, with plans for phase 2 capacity - Additional battery capacity is planned in the US, Slovakia, and Morocco [4] EV Battery Shipments - Shipments for mid- to high-end EV models accounted for less than **10%** of total EV battery shipments in 2023 - By the end of 2025, this percentage increased to over **20%**, with expectations for continued growth in 2026 [5] Financial Overview - **Current Price**: Rmb 41.34 (as of January 16, 2026) - **Target Price**: Rmb 56.70 - **Expected Share Price Return**: **37.2%** - **Expected Dividend Yield**: **0.3%** - **Expected Total Return**: **37.4%** - **Market Capitalization**: Rmb 74,995 million (approximately US$ 10,762 million) [6] Valuation - Gotion is valued at **Rmb 56.70/share** based on an EV/EBITDA approach, using a multiple of **16.7x** for 2026E, which is below the historical average due to a slowdown in EBITDA growth [8] Risks - Potential downside risks include: 1. Slower-than-expected capacity expansion ramp-up 2. Lower-than-expected product margins 3. Worse-than-expected demand for new energy vehicles (NEV) [9] Additional Insights - The company is actively working on improving its product margins and expanding its market presence in the EV sector - Management's focus on cost pass-through mechanisms indicates a proactive approach to managing raw material price volatility This summary encapsulates the critical insights from Gotion High Tech's 2026 Business Outlook Call, highlighting the company's growth trajectory, strategic initiatives, and potential risks in the evolving battery manufacturing landscape.