Action | 17 Sep 2025 03:47:36 ET │ 13 pages CALB Group Co Ltd (3931.HK) Model Update; TP Raised to HK$33.4/sh, Maintain Buy CITI'S TAKE We update our CALB model post 1H25 result and revise up our 2025/26/27E earnings forecasts by 28%/22%/18% to Rmb1,721/2,640/3,583mn mainly to factor in mgmt. guidance and higher battery sales volume assumptions. Our TP of HK$33.40 (previously HK$19.90) is based on a 2026E P/E of 20.6x, the global battery producers' average. We believe the strong ESS battery demand and comme ...

Core Viewpoint - The article highlights the rapid development and commercialization of solid-state batteries, with significant advancements from various companies in the industry, indicating a promising future for electric vehicles and other applications [2][3][4]. Group 1: Company Developments - Panasonic Energy announced its commitment to producing solid-state batteries, aiming for sample shipments by the fiscal year 2026, with a potential 25% increase in battery capacity by 2027 [2]. - Ganfeng Lithium reported ongoing development in solid-state batteries, with applications in electric vehicles and drones, and is accelerating its industrialization process [3]. - Contemporary Amperex Technology Co., Ltd. (CATL) is collaborating with multiple domestic and international battery manufacturers and vehicle companies to advance solid-state battery technology [3]. - A new solid-state battery from Guoxuan High-Tech, featuring a sulfide solid electrolyte and high nickel content, has achieved an energy density of 400 Wh/kg, with positive customer feedback on performance and safety [3]. Group 2: Market Insights - According to CICC, the solid-state battery sector is entering a critical phase of industrialization, with a projected market space of 2.5 billion yuan for solid-state battery equipment by 2027, growing at a CAGR of 122% to reach 27.3 billion yuan by 2030 [4]. - The value of mid-stage equipment in the solid-state battery supply chain is expected to rise to 75%-80%, with new processes like dry electrode and isostatic pressing being key growth drivers [4]. - The commercialization of solid-state batteries is anticipated to follow a "high-end breakthrough, gradual penetration" approach, initially targeting high-value sectors such as consumer electronics and aviation [4].

Group 1 - QuantumScape Corp. (NYSE:QS) experienced a significant stock price increase of 18.23%, closing at $12.13, driven by strong investor confidence following a demonstration of its solid-state battery technology [1][3]. - The demonstration showcased advancements in battery chemistry and charging performance, with the ability to charge from 10% to 80% in approximately 12 minutes, a substantial improvement over current electric vehicle charging times [2][4]. - QuantumScape's solid-state batteries exhibit impressive specifications, including an energy density of 844 Wh/L and a continuous discharge rate of 10C, indicating their potential to revolutionize the electric vehicle industry [4].

Battery Technology - Panasonic plans to debut sample solid-state batteries by the fiscal year ending March 2027 [1] - The company aims to enter the next-generation batteries market for robots and other systems [1]

Core Viewpoint - Panasonic is working on developing a new type of higher-capacity battery within approximately two years, which could significantly enhance the driving range of electric vehicles, marking a major advancement for the company as a supplier to Tesla [1] Company Summary - Panasonic aims to innovate in battery technology by creating a higher-capacity battery [1] - The development timeline for this new battery is set at around two years [1] Industry Summary - The advancement in battery technology is expected to have a substantial impact on the electric vehicle market, particularly in extending driving ranges [1] - As a key supplier to Tesla, Panasonic's innovations could influence competitive dynamics within the electric vehicle industry [1]

Industry Impact - South Korea's battery industry faces disruption due to the expulsion of battery engineers [1] Geopolitical Implications - The expulsions, involving ICE (Immigration and Customs Enforcement), have caused shock in South Korea [1]

Core Viewpoint - The recent surge in the lithium battery sector, driven by CATL's strong performance, indicates a recovery in the industry after a prolonged downturn, with significant growth potential in new technologies and applications [2][5][28]. Group 1: Market Performance - CATL's stock rose over 14% in A-shares, surpassing its historical high from 2021, while Hong Kong shares increased nearly 9% [2][4]. - The battery ETF (561910.SH) saw a rise of 2.05%, reflecting a year-to-date increase of over 53%, making it the highest-performing battery-themed ETF in A-shares [15][36]. - The semiconductor sector also showed strong activity, with stocks like Shanghai Beiling and Naxin Micro reaching their daily limits [10]. Group 2: Industry Trends - The lithium battery sector is experiencing a notable recovery, with signs of a bottom reversal after three years of decline, driven by high capacity utilization rates among leading companies [28][39]. - Demand for energy storage has exceeded expectations, with domestic energy storage projects increasing significantly, leading to a surge in new orders for lithium batteries [29][30]. - Solid-state battery technology is advancing rapidly, with several automakers planning to adopt it by 2027, further stimulating market interest [30][31]. Group 3: Company Performance - CATL reported a revenue of 1788.86 billion yuan in the first half of the year, a year-on-year increase of 7.27%, with net profit rising by 33.33% [32]. - Other leading companies in the sector, such as Zhongxin Innovation and Guoxuan High-Tech, also reported significant revenue growth, indicating a broader recovery trend in the industry [32][36]. - The overall market sentiment is shifting positively, with expectations of sustained demand growth in 2026, which could drive profitability recovery across the sector [35][36].

Market Overview - The S&P 500's equity risk premium has reached zero, indicating a potential bubble in the market [1] - Massive investments in data centers are reminiscent of the tech boom, with concerns about sustainability and reliance on a single client, OpenAI [2][3] Investment Strategy - The company is adopting a defensive stance in equity investments, acknowledging the risks associated with current market exuberance [4][3] - There is a cautionary approach towards tech stocks due to potential reversals in the Japanese carry trade, which could impact US tech investments [8][7] Japan's Economic Policy - Japan's current policy rate is approximately 0.5%, with expectations for a 25 basis point increase, which could reverse the carry trade [6][7] - An increase in Japanese interest rates may negatively affect US tech stocks, as Japanese investors may withdraw funds from the US [8] China Market Insights - The company has allocated about 10% of its funds to China, indicating a belief in the potential for growth despite being underweight in the US [10] - Chinese stocks are considered cheap, and the government is showing a willingness to support rising share prices, which is crucial for investment [11][12] Housing Market in China - The Chinese housing market requires a clearing of excess capacity, and while lower interest rates may help, significant government intervention may be necessary [17][19] - The government could potentially buy excess housing for social purposes, which would significantly impact the market [19] Electric Vehicle (EV) Sector in China - The company is currently avoiding investments in the Chinese EV sector due to concerns about excess capacity and market consolidation [20][22] - There is an expectation of consolidation in the automobile market, and the company is looking for potential acquisition targets among struggling firms [21][22]

Group 1 - QuantumScape Corp. (NYSE:QS) shares increased by 12.43% to close at $9.95, driven by investor optimism regarding the electric Ducati V21L launch [1][3] - The Ducati V21L features QSE-5 battery cells developed in collaboration with PowerCo, a subsidiary of Volkswagen Group, showcasing QuantumScape's solid-state battery technology [2][3] - The battery system demonstrated by QuantumScape has an energy density of 844 Wh/L, can charge from 10% to 80% in just over 12 minutes, and supports a continuous discharge rate of 10C [4] Group 2 - PowerCo CEO Frank Blome emphasized that solid-state batteries will transform high-performance vehicles, highlighting the collaboration between QuantumScape's battery scientists and PowerCo's manufacturing expertise [4]

Core Insights - QuantumScape Corp. has successfully transitioned its solid-state battery technology from laboratory testing to real-world application, showcased by the Ducati V21L motorcycle at the IAA Mobility show in Munich [1][2] Group 1: Technological Advancements - The Ducati V21L motorcycle features QuantumScape's QSE-5 cells, which are anode-free solid-state lithium-metal batteries, demonstrating impressive specifications such as 844 Wh/L energy density and ultra-fast charging capabilities [2] - The COBRA process, which QuantumScape has adopted for production, significantly enhances productivity, achieving 25 times the output of the previous Raptor process and 200 times the output compared to early 2023 levels [4][7] Group 2: Financial and Strategic Developments - QuantumScape has strengthened its partnership with Volkswagen, securing up to $131 million in milestone-based payments over the next two years, extending its cash runway into 2029 [3][7] - The company is broadening its customer base by signing a joint development agreement with another undisclosed major global automaker, indicating increased industry validation and a pathway toward commercialization [8] Group 3: Market Performance and Future Outlook - Over the past six months, QuantumScape's stock has increased by more than 90%, outperforming the industry's growth [9] - The Zacks Consensus Estimate for QuantumScape's loss per share has been narrowed, reflecting improved market sentiment and expectations for the company's financial performance [10][11]