2025-09-28 14:57Summary of Conference Call on Greater China EV and EV Battery Industry Industry Overview - Industry: Greater China Electric Vehicle (EV) and Energy Storage System (ESS) Battery Market - Key Players: CATL, CALB, EVE Core Insights 1. ESS Demand Surge: - Total ESS order volume in China reached 26GW/69GWh in August, reflecting a year-over-year increase of over 500% [1] - Demand remains strong post "531" rush installation of wind and solar projects, supported by improved returns from independent ESS projects [1] 2. Future Demand Projections: - ESS battery demand is expected to remain solid from 2025 to 2030, driven by strong policy support in China and growth in overseas markets [2] - China's NDRC and NEA set a target to increase cumulative installed capacity of new-type energy storage to 180GW by 2027, up from 97GW as of July 2025 [2] 3. Price Trends: - ESS battery prices have declined by 45-70% from 2022 to the first half of 2025, but a mild rebound is anticipated due to rising demand and tighter supply [3] - Stable average selling prices (ASP) for EV batteries are expected, with less discounting to auto OEMs amid anti-involution trends [3] 4. Earnings and Price Objective Adjustments: - EPS and price objectives for major battery companies have been lifted due to demand growth and supportive policies: - CATL: 2025-27E total battery shipment raised by 3%/3%/2%, EPS increased by 3%/4%/3% [4] - CALB: 2025-27E total battery shipment raised by 9%/14%/17%, EPS forecast increased by 14%/19%/19% [4] - EVE: 2026-27E total battery shipment raised by 7%/6%, EPS forecast increased by 8%/10% [4] 5. Valuation Changes: - Price objectives for key companies: - CALB: New PO of 35, up from 24, representing a 27.3% upside [7] - CATL-A: New PO of 467, up from 389, representing a 26.2% upside [7] - EVE: New PO of 85, up from 70, representing an 18.4% upside [7] Additional Insights 1. Technological Advancements: - CATL launched the Shenxing Pro battery, a lithium iron phosphate battery designed for the European market, featuring high safety and performance standards [18] - CATL's sodium-ion battery has passed certification and is set for mass production by the end of 2025, offering advantages in energy density and lifecycle costs [19] 2. Market Share and Production: - CATL held a 43.2% domestic market share in July, with planned production of 69.5GWh in September, indicating strong demand for ESS batteries [20] 3. Earnings Revisions: - Overall earnings for 2025-27E have been revised upwards by 3%/4%/3% due to higher revenue forecasts and improved ASPs for both EV and ESS batteries [21] 4. Quarterly Earnings Expectations: - Earnings are expected to rise 34% YoY in 3Q25 and 35% YoY in 4Q25, reflecting strong demand and operational efficiency [24] 5. Valuation Methodology: - Valuations for CATL-H were derived from DCF and EV/EBITDA methodologies, with a new fair value of HK$570, up from HK$475 [25][26][27] This summary encapsulates the key points from the conference call regarding the Greater China EV and ESS battery market, highlighting demand trends, pricing dynamics, earnings adjustments, and technological advancements.