China Merchants Securities released a research report stating that major lithium battery companies have initiated a new round of capital expenditures in 2025, with the current expansion phase now accelerating. Capital expenditure in 2026 is expected to reach a record high. From a micro perspective, contract liabilities and new order data for lithium battery equipment companies continue to show positive trends, indicating strong subsequent operational performance. Concurrently, progress in solid-state battery R&D is shifting focus towards cost reduction and efficiency improvements in equipment. The construction of mass production lines for all-solid-state batteries is also being scheduled for 2026, which is expected to bring new growth and opportunities for lithium battery equipment manufacturers.
The lithium battery industry's expansion has entered an accelerated phase. In recent years, global lithium battery demand has consistently exceeded expectations. Due to insufficient capacity at leading enterprises in 2025, order spillover began to occur, and by the second half of 2025, second and third-tier manufacturers also successively faced supply shortages. Starting from 2025, major lithium battery companies have embarked on a new round of large-scale capacity expansion. According to incomplete statistics, new capacity expansion in 2026 is expected to be close to 1 TWh, setting a new historical record. Recently, leading lithium battery manufacturers have successively launched equipment tenders, with orders from top manufacturers already visible in the scale of hundreds of GWh, and further orders in the scale of hundreds of GWh are anticipated.
Lithium battery equipment manufacturers are seeing record-high orders, with strong earnings expected. Since 2025, the year-on-year growth rate of contract liabilities for most equipment manufacturers has been improving continuously, turning positive for the vast majority in Q3, with many surpassing historical peaks. Furthermore, based on industry feedback, the volume of new orders for lithium battery equipment manufacturers in 2026 remains strong. As payment for lithium battery equipment typically occurs after debugging and involves long delivery cycles, although industry orders improved significantly in 2025, profitability improvements are likely to begin in 2026.
The scheduling of mass production lines for solid-state batteries also brings incremental growth to equipment companies. In 2025, leading lithium battery manufacturers made progress in solid-state battery R&D. It is anticipated that the industry's R&D focus for all-solid-state batteries in 2026 will gradually shift towards finalizing pack solutions and reducing costs while improving efficiency in the equipment segment, laying the groundwork for future vehicle testing of all-solid-state batteries. Leading battery manufacturers are expected to successively build pilot production lines for all-solid-state batteries in 2026, which will also create demand increments and opportunities for equipment companies.
In terms of investment targets, focus on companies such as Hangzhou First Applied Material (300450.SZ), Shanghai Xianhui Technology (688155.SH), Shenzhen Inovance Technology (688518.SH), Haimuxing (688559.SH), Delong Laser (688170.SH), ST Yifei (688646.SH), Yinghe Technology (300457.SZ), Hangke Technology (688006.SH), and Xinyuren (688573.SH).
Risks include fluctuations in industry policies and technological progress falling short of expectations.
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