Group 1 - The company, Weilan Lithium Core (002245), stated on August 27 that it does not supply terminal manufacturers directly in the BBU battery field [1] - The company specializes in the manufacturing of cylindrical lithium batteries and does not engage in the entire power system [1]

Core Viewpoint - The report highlights the strong growth potential of Weilan Lithium Core (002245) driven by its lithium battery business and strategic positioning in the AI and robotics sectors, leading to a "buy" rating for the stock [1][6]. Business Development - Weilan Lithium Core has three main business segments: LED chips, lithium batteries, and metal logistics, with the lithium battery segment showing significant growth [2]. - In H1 2025, the company reported revenues of 11.90 billion CNY from metal logistics and 8.60 billion CNY from LED, with year-on-year growth of 2.9% and 14.6% respectively [2]. - The lithium battery segment achieved revenues of 15.95 billion CNY, a year-on-year increase of 44.2%, contributing 42.8% to total revenue [2]. Market Trends - The demand for Battery Backup Units (BBU) is expected to rise significantly due to the rapid advancement of AI technologies, with a projected global market demand of 610 million units by 2030, growing at a CAGR of 51.7% from 2024 to 2030 [3]. - The humanoid robot market is expanding, with expectations of over 100 GWh in lithium battery shipments by 2030, reflecting a compound annual growth rate exceeding 100% from 2025 to 2030 [3]. Technological Advancements - The company is focusing on high-end technology optimization, including the launch of a new high-capacity cylindrical battery and advancements in solid-state battery technology [4]. - The overseas revenue reached 5.03 billion CNY in H1 2025, marking a year-on-year increase of 55.4%, indicating strong international market growth [4]. Financial Performance - In H1 2025, Weilan Lithium Core reported total revenues of 37.27 billion CNY, a year-on-year increase of 21.6%, and a net profit of 3.33 billion CNY, up 99.1% [5]. - The gross margin improved to 20.8%, reflecting a year-on-year increase of 5.8 percentage points [5]. Investment Outlook - The company is positioned as a leader in lithium batteries for electric tools, with ongoing expansion in AI servers and robotics applications, suggesting robust growth potential [6]. - The forecasted net profits for 2025, 2026, and 2027 are 8.3 billion CNY, 10.2 billion CNY, and 13.0 billion CNY respectively, with corresponding PE ratios of 26, 21, and 17 [7].

Group 1: Company Performance and Recovery - The company has faced performance pressure in recent years but is expected to see significant recovery in 2024, with a focus on lithium battery, metal logistics, and LED businesses [4][6][7] - In H1 2024, the company's revenues from lithium batteries, metal logistics, and LED businesses were 1.11 billion, 1.16 billion, and 750 million yuan respectively, showing year-on-year growth of 79%, 14%, and 25% [4][6] - The company is a leading player in the small cylindrical battery market, with a focus on electric tools and a recovery in demand expected in 2024 [4][6] Group 2: Tool Battery Segment - The tool battery segment is returning to an upward cycle, with demand recovering after two years of decline, and exports of electric drills, chainsaws, and lawnmowers expected to grow by 32%, 29%, and 72% respectively in 2024 [2][8][10] - The company has seen a significant increase in sales volume and profit per unit, with sales of 1.75 billion units in H1 2024 and an expected profit of over 0.3 yuan per unit [2][18] - The U.S. is in a rate-cutting cycle, which is expected to sustain tool demand, with a projected double-digit growth in tool demand in 2025 [13][16] Group 3: Non-Tool Battery Segment - The company is expanding into new markets such as Battery Backup Units (BBU), which are expected to grow at a CAGR of 7-9% from 2024 to 2028 [3][26] - BBU batteries are anticipated to have significantly higher profitability compared to traditional cylindrical batteries, with potential for domestic substitution [3][34] - The company is actively exploring applications in smart mobility, low-altitude, and robotics, with projected battery revenues of 2.33 billion, 4.2 billion, and 4.2 billion yuan from 2024 to 2026 [3][26] Group 4: Metal Logistics and LED Business - The metal logistics business is expected to grow steadily, with projected revenues of 2.4 billion, 2.6 billion, and 2.7 billion yuan from 2024 to 2026 [4][6] - The LED business is experiencing a recovery in profitability, with revenues expected to reach 1.7 billion, 1.9 billion, and 2.1 billion yuan from 2024 to 2026, reflecting a significant improvement in market conditions [4][6]