The lithium battery leader, Eve Energy Co.,Ltd. (SHE: 300014), released its interim earnings forecast for 2026 yesterday, sparking significant market discussion today. As the first such forecast in the lithium battery sector, its signaling effect is pronounced. Following the announcement, Eve Energy Co.,Ltd. (SHE: 300014) shares surged nearly 15% intraday, closing at 66.88 yuan per share, implying a forward P/E ratio of approximately 18 times based on Soochow Securities' annual profit expectation of 7.23 billion yuan.
The company's performance appraisal and analysis skill was utilized to examine this forecast. Three key questions were posed: 1) Analyze the interim forecast; 2) Identify reasons for the substantial profit growth; 3) Assess the outlook for the new energy sector.
Comprehensive Performance Overview: Profits Double with Quarterly Acceleration
According to the announcement, Eve Energy Co.,Ltd. (SHE: 300014) expects net profit attributable to shareholders of 3.13 billion to 3.371 billion yuan for the first half of 2026, a year-on-year increase of 95% to 110%. Non-GAAP net profit is projected between 2.43 billion and 2.603 billion yuan, soaring 110% to 125%. Revenue is estimated to grow about 60% year-on-year.
Breaking it down by quarter, Q2 net profit is estimated at 1.684 billion to 1.925 billion yuan, representing a sequential growth of 16% to 33% from Q1, marking a second consecutive quarter of accelerating growth. The Q1 net profit of 1.446 billion yuan, up 31.35% year-on-year, was already impressive, and the further climb in Q2 confirms the company is on a clear acceleration trajectory.
Regarding whether this beats expectations, prior to the forecast, institutional full-year net profit estimates for Eve Energy Co.,Ltd. (SHE: 300014) ranged from approximately 6.2 to 7.1 billion yuan. The lower end of the H1 forecast (3.13 billion yuan) already exceeds the reasonable range derived from a typical 42% to 46% seasonal share (about 3.106 billion yuan), with the upper end significantly surpassing market consensus. The latest tracking data indicates the company was marked "in line with expectations" during the Q1 earnings season, but the profit slope revealed in this interim forecast clearly breaks the market's previously conservative linear extrapolation. The conclusion is that the results are above expectations.
For the full year, the consensus expects revenue to increase 63% year-on-year and net profit attributable to shareholders to grow 69%, maintaining a high growth rate.
Four Key Drivers Behind the Strong Interim Results
First, explosive growth in energy storage battery shipments. Q2 storage shipments exceeded 25 GWh, up over 60% year-on-year, with on-site contracts signed at the SNEC exhibition surpassing 67 GWh.
Second, dual drivers from power batteries: large cylindrical cells and commercial vehicles. Q2 power battery shipments exceeded 15 GWh, an 80% year-on-year increase, with commercial vehicle shipments doubling.
Third, better-than-expected cost control. Despite rising raw material prices, gross margin improved sequentially, with profit per Wh rising to 0.025 yuan.
Fourth, investment income and hedging gains. Q2 saw contributions from associates and joint ventures, along with 342 million yuan in unrealized gains from hedging that were not included in the reported figures.
Energy Storage Sector Outlook: Demand Growth and Structural Upgrading in Sync
The above-expectation forecast from Eve Energy Co.,Ltd. (SHE: 300014) largely reflects the structural boom in the energy storage industry. From an industry perspective, the high certainty is evident in two dimensions.
On the demand side, growth is still accelerating. From January to May 2026, cumulative domestic energy storage battery sales reached 255.5 GWh, a year-on-year increase of 87.7%, approximately 2.5 times the growth rate of power batteries (34.9%) for the same period. Incremental demand is driven by three factors: China's AIDC construction plan, which is expected to bring about 125 GWh of new storage demand over the next five years; accelerated deployment of overseas grid-scale storage projects, particularly in North America and Europe, with Eve Energy Co.,Ltd.'s (SHE: 300014) North American projects progressing steadily and European projects meeting 100% of service targets; and domestic anti-internal competition policies promoting industry consolidation, leading to a bottoming and recovery in cell prices, with price increases gradually being passed through to storage system integration quotes, suggesting a potential recovery in industry profitability.
On the supply side, a tightening competitive landscape supports profits. In June, the combined production schedule for six major lithium battery companies was about 175.7 GWh, up 68% year-on-year and 6% month-on-month. Leading players, with a combined market share exceeding 60%, are leveraging scale and customer lock-in advantages to recover profitability first, while smaller players are accelerating capacity exits under cost pressure, further strengthening the "one superpower, several strong players" structure.
Against a backdrop of strong order books and increasingly rational competition, the energy storage industry is transitioning from a phase of "exchanging price for volume" in extensive expansion to a stage of "simultaneous volume and profit growth" for value realization. Overall, the assessment of the new energy sector remains optimistic.
Current Valuation and Expectation Gap
From the perspective of market expectation gaps, prior core concerns centered on rising lithium prices eroding profits and the continuation of price wars in energy storage. However, the H1 2026 forecast, showing profit growth outpacing revenue growth by over 30 percentage points, strongly counters these narratives.
Furthermore, if subsequent projects like the BMW large cylindrical cell initiative and North American energy storage customer orders see substantial volume increases, the company's profit curve still has room for upward revision.
Risk factors to note include the potential challenge to H2 supply chain costs if currently high lithium prices rise further beyond hedging coverage. Additionally, the base effect from an annual revenue scale exceeding 60 billion yuan will naturally lead to a convergence in future growth rates. Moreover, the company's early redemption of its convertible bonds in March 2026 triggered market risk aversion, causing the stock to drop nearly 10% intraday at the time; the progress in repairing shareholder relations following this governance event warrants ongoing observation.
Finally, an HTML-formatted performance appraisal report was generated for reference.
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