CATL(SZ:300750)2025-12-05 06:35Summary of Conference Call Notes on China Specialty Chemicals and Lithium Industry Industry Overview - The focus is on the lithium battery supply chain, particularly in the context of the upcoming Chinese New Year (CNY) and the anticipated demand for energy storage systems (ESS) [1] - The sentiment is cautiously optimistic regarding the battery chain rally, suggesting that much of the positive outlook has already been priced in [1] Key Company Insights CATL (Contemporary Amperex Technology Co., Ltd.) - CATL is highlighted as a preferred investment choice for the first quarter of 2026 due to its defensive positioning amid uncertainties in production and electric vehicle (EV) demand [1] - The valuation for CATL-H is set at HK$621 per share, based on a target EV/EBITDA multiple of 17.3x for 2025, which is 0.15 standard deviations above its historical average [19] - The valuation for CATL-A is set at Rmb571 per share, also based on a target EV/EBITDA multiple of 17.3x for 2026 [21] - Risks associated with CATL include lower-than-expected EV demand, increased competition in the EV battery market, and higher raw material costs [20][21] Market Dynamics - Lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) average selling prices (ASP) have increased week-over-week, with Li2CO3 priced at Rmb94,000 per ton and LiOH at Rmb82,500 per ton as of December 4, 2025 [2] - Production of Li2CO3 in China remained stable at 21,939 tons, with variations in output from different sources: brine (-4%), lepidolite (+2%), spodumene (+1%), and recycling (+2%) [2] - Total inventory of Li2CO3 decreased by 2% week-over-week to 113,602 tons, with downstream players' inventory increasing by 4%, while smelters' inventory decreased by 15% [2] Investment Recommendations - The report suggests a focus on battery-related companies with higher elasticity, particularly those involved in lithium, separators, electrolytes, cathodes, and tier-2 battery makers with significant ESS exposure [1] - The anticipated seasonal supply/demand mismatch in the battery value chain is expected to create opportunities in the traditional peak season from March to April [1] Conclusion - The lithium market is experiencing a cautious yet optimistic phase, with CATL positioned as a strong investment choice amid potential risks and uncertainties in the EV sector. The dynamics of lithium pricing and production are critical to monitor as the market approaches the peak demand season.