KDL(SZ:002850)2026-04-01 09:59Summary of Shenzhen Kedali Conference Call Company Overview - Company: Shenzhen Kedali (002850.SZ) - Industry: Lithium-ion battery parts manufacturing - Established: 1996 - Production Plants: 16 planned (13 in China, 3 in Europe) - Key Partnerships: Collaborates with major battery manufacturers like CATL, BYD, Panasonic, and LG [17][18] Financial Performance - 4Q25 Results: - Net Profit: Rmb575 million, up 37% QoQ and 13% YoY - Full Year Net Profit exceeded estimates by 7% [1] - 1Q26 Guidance: - Expected revenue growth: 30-40% YoY - Stable Net Profit Margin (NpM) anticipated [2] - FY26 Estimates: - Net Profit: Rmb2.18 billion - Diluted EPS: Rmb7.907, representing a 23.6% growth [5][11] Growth Drivers - Demand for Energy Storage Systems (ESS): - Strong demand is driving revenue growth and utilization rates above 80% [1] - Overseas Expansion: - Revenue contribution from overseas plants expected to increase, with >Rmb1.0 billion output projected from EU plants [2] - Capacity Expansion: - New facilities in Thailand and the US expected to be completed by 2027 and 2028 respectively [2][3] Capital Expenditure - Capex Focus: - Primarily on equipment procurement in FY26, with land acquisition and factory build-up planned post-2026 [3] Valuation and Target Price - Revised Target Price: - Increased to Rmb222/share from Rmb204/share, based on a 28x P/E multiple for 2026E [4][19] - Market Capitalization: - Approximately Rmb48.75 billion (US$7.05 billion) [7] Risks - Potential Downside Risks: - Slower-than-expected battery demand - Increased competition leading to price wars - Rising raw material costs, particularly aluminum and copper [20] Conclusion - Investment Recommendation: - Maintain a Buy rating due to strong growth prospects driven by ESS demand and strategic expansions [18]