Summary of Conference Call on China Battery Materials Industry Overview - The focus of the conference call is on the **China Battery Materials** industry, particularly the production pipeline of major battery manufacturers for January 2026. Key Points Production Pipeline Estimates - **ZE Consulting** estimates that the production pipeline of the top five battery makers may decline by **7% month-over-month (MoM)** in January 2026, with **CATL's production** expected to decrease by **10%** [1][2] - This decline is more significant than the market's expectation of a low single-digit decline for January, indicating a weaker production plan than anticipated [1] Factors Influencing Production Decline - The reduction in production is attributed to ongoing negotiations between battery manufacturers and upstream suppliers rather than a significant drop in actual demand [1] - Maintenance plans announced by cathode manufacturers are likely a response to rising lithium carbonate futures prices, as noted by **Tianqi Lithium**, which has adjusted its spot prices to align with futures [1] Cathode Production Insights - Major LFP cathode manufacturers, including **Hunan Yuneng**, **Shenzhen Dynanonic**, and **Jiangsu Lopal**, have announced offline maintenance plans for January 2026 due to rising raw material costs and low processing fees [2] - The cathode production pipeline is projected to decrease by **10% MoM**, with LFP cathodes expected to drop by **13% MoM** and NCM cathodes by **1% MoM** [2] Company Valuation and Risks - **CATL** is valued at **HK$621/share** based on a target multiple of **17.3x 2025E EV/EBITDA**, which is **0.15 standard deviations above** its historical average [5] - The target price implies a **36.5x 2025E P/E** and **27.7x 2026E P/E** [5] - Risks to achieving the target price include lower-than-expected EV demand, increased competition in the EV battery market, and higher raw material costs [6][7] Conclusion - The overall sentiment remains defensive regarding the battery supply chain due to uncertainties in production and tepid demand for electric vehicles (EVs) [1] - CATL is identified as a top pick within the industry, despite the challenges ahead [1]