The lithium battery sector reported revenue of RMB 1.78 trillion in the first three quarters of 2025, marking a 12.81% year-on-year increase, with 78.85% of companies achieving positive growth. Net profit reached RMB 67.95 billion, up 28.07% YoY, with 59.43% of firms posting profit growth.
On the demand side, China’s energy storage lithium battery shipments totaled 430GWh during the period, surging 99.07% YoY. Across the supply chain, prices of key materials remained stable or rose moderately. While lithium carbonate-related materials remained under pressure, electrolyte segment prices rebounded sharply after a short-term decline, and cobalt-related products saw significant gains due to external policy impacts.
**Key Highlights:** 1. **Sector Performance Improvement** - In 2024, the sector’s revenue edged up 0.14% to RMB 2.25 trillion, but net profit fell 21.68% to RMB 111.39 billion. - By Q3 2025, revenue grew 12.81% YoY to RMB 1.78 trillion, with 78.85% of firms expanding sales. Net profit rose 28.07% to RMB 67.95 billion, with 59.43% of companies profitable. - Three Henan-based lithium battery firms accounted for just 2.88% of the sector. Their revenue contribution hovered around 1.1%, but profitability was volatile—2024 saw a 44.85% revenue drop and net losses, while Q3 2025 revenue grew 3.20% but losses persisted.
2. **Strong EV Growth, Energy Storage Demand Exceeds Expectations** - From January to September 2025, China’s NEV sales jumped 34.55% YoY to 11.196 million units, capturing 46.03% market share. Exports soared 89.4% to 1.758 million units. - Power and other battery output surged 5,140% YoY to 1,121.90GWh, with exports making up 18.7% (199.90GWh). - Energy storage battery shipments accounted for 34.15% of total output in H1 2025, up 5.64 percentage points from 2024.
3. **Supply Chain Prices: Stable with Upside** - Lithium battery material prices trended steadily higher in 2025. Lithium carbonate-related materials faced pressure, while electrolyte prices rebounded sharply, and cobalt products rallied on policy shifts. - Electrolyte price hikes stemmed from short-term supply-demand imbalances. As of November 7, lithium hexafluorophosphate prices hit RMB 119,000/ton, up 90.40% year-to-date, with electrolytes rising 44.33%.
**Investment Recommendation:** Maintain an “Outperform” rating. As of November 7, 2025, lithium battery and ChiNext P/E ratios stood at 29.39x and 43.55x, respectively. Given industry prospects and valuations, investors should focus on four key themes aligned with sector trends, global NEV developments, and supply chain dynamics.
**Risks:** - Global/domestic economic slowdown; - NEV sales underperformance; - Policy implementation delays; - Intensified competition; - Volatile segment prices; - Systemic risks.
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