Shenwan Hongyuan Group Co., Ltd. has initiated coverage on CALB (03931) with a "Buy" rating, citing robust industry demand and promising profitability as the company scales up production in power and energy storage sectors. The lithium battery industry is witnessing accelerated electrification penetration in commercial vehicles and a construction boom driven by grid parity in solar-plus-storage projects. As a leading player, CALB is poised to benefit from technological premiums through battery cell product iterations while expanding market share.
The company is actively diversifying its client base in the power sector and accelerating overseas expansion for energy storage cells and systems. Shenwan Hongyuan expects scale effects to materialize as shipments ramp up. Key highlights include:
**Strategic Focus Yields Results: Multi-Dimensional Breakthroughs Drive Growth** CALB has undergone multiple strategic upgrades—from lithium battery market entry via restructuring to focusing on ternary batteries for passenger vehicles, and now accelerating globalization post-HKEX listing. Its hybrid ownership structure and stable management team provide strong support. With domestic and international production bases underway, CALB has built a comprehensive product portfolio covering power and storage applications, including 5C ultra-fast charging and high-energy-density power batteries, as well as large-capacity storage cells.
In 1H25, revenue rose 31.7% YoY to RMB16.4 billion, with net profit reaching RMB470 million (net margin: 2.8%), reflecting gradual margin improvement.
**Dual Demand Surge: Industry Consolidation Opens Profit Recovery Cycle** China’s NEV sales hit 11.2 million units in 1-3Q25 (46% penetration rate), with commercial vehicle electrification and higher battery capacity per vehicle driving power battery demand. The energy storage market remains buoyant, supported by growing domestic tenders and diversified investors. Global energy storage battery shipments are projected to jump from 530GWh in 2025 to 1,343GWh by 2028.
As industry competition tilts toward top-tier and emerging second-tier players, CALB’s rising market share and improving supply-demand dynamics create room for profitability recovery.
**Strengthening Core Competitiveness: Building a Global Battery Brand** CALB’s expanding power and storage shipments have boosted its market presence, with top-five client reliance dropping from 71% (2023) to 55% (2024). Partnerships now span global automakers, storage firms, and emerging sectors, with key collaborations evolving into strategic alliances. Domestic capacity is growing steadily, while overseas bases (e.g., Portugal, Thailand) progress, forming a global production network.
Cost optimization through scale effects and refined management, coupled with premium pricing power from high-end products (e.g., 430Wh/kg all-solid-state batteries), enhances CALB’s technological edge and global competitiveness.
**Risks**: - Sharp rise in raw material prices - Intensified competition leading to price declines - Overseas trade protection policies
Comments