CATL(SZ:300750)2025-12-01 00:49Summary of the Conference Call on China Battery Materials Industry Overview - The report focuses on the China Battery Supply Chain, particularly the battery materials industry and electric vehicle (EV) battery production [1][3]. Key Insights - Production Trends: The production pipeline of the top five battery makers is expected to remain flat month-over-month (MoM) and show a 48% year-over-year (YoY) increase, reaching approximately 148 GWh in December 2025 [1][3]. - EV Battery Demand: There is a noted decline in EV battery production due to: 1. The approach of a traditional slack season. 2. The consumption of front-loading demand as China plans to halve the purchase tax exemption for EVs starting January 1, 2026 [1]. - Energy Storage Systems (ESS): Demand for ESS batteries remains strong, which is helping to offset the downturn in EV battery demand [1]. - CATL's Production: CATL, a leading battery manufacturer, is projected to increase its production pipeline by 4% MoM in December 2025, indicating robust operational capacity [1]. Financial Valuation - CATL Valuation: - The target price for CATL's Hong Kong shares is set at HK$621/share, based on a 17.3x 2025E EV/EBITDA multiple, which is 0.15 standard deviations above its historical average [8]. - For CATL's A-shares, the target price is Rmb571/share, also based on a 17.3x 2026E EV/EBITDA multiple [10]. Risks Identified - The report highlights several risks that could impact CATL's stock performance: 1. Lower-than-expected demand for EVs. 2. Increased competition in the EV battery market, potentially reducing CATL's market share. 3. Higher-than-expected raw material costs [9][10]. Production Forecasts - Cathode Production: Expected to increase by 1% MoM [4]. - Anode Production: Anticipated to remain flat MoM [5]. Conclusion - The China battery materials industry is currently experiencing a mixed landscape with strong ESS demand counterbalancing the seasonal decline in EV battery production. CATL remains a key player with positive production forecasts and a solid valuation outlook, although it faces significant risks that could affect its market position and stock performance [1][9][10].