HAITONG SEC released a Research Report stating that the demand for lithium battery equipment is expected to bottom out, and investments are likely to rebound.
According to the Zhitong Finance APP, HAITONG SEC released a Research Report stating that the demand for lithium battery equipment is expected to bottom out, and investments are likely to rebound. Against the backdrop of strong end demand for lithium batteries and high capacity utilization rates at battery factories, demand for increased capital expenditures from battery manufacturers is expected to strengthen. It is anticipated that lithium battery equipment companies will fully benefit, with order volumes likely to recover, and there will be improvements in revenue recognition cycles and order gross margins.
Event: On December 10, Contemporary Amperex Technology announced an announcement regarding the establishment of a joint venture factory with the auto manufacturer Stellantis, declaring an agreement to jointly establish a joint venture in Zaragoza, Spain, and build a power battery factory. The total investment is expected to be 4.038 billion euros, with both parties holding 50% of the shares, and the total construction period is expected to be 4 years (final results will be based on actual construction status). Once the factory is completed, the annual production capacity will reach 50 GWh, primarily supplying batteries to Stellantis.
HAITONG SEC's main points are as follows:
Stellantis is accelerating its electrification transformation. According to Stellantis' official website, Stellantis was formed by the merger of PSA and FCA in 2021, headquartered in the Netherlands. The company owns several well-known brands, including Peugeot, Citroën, Fiat, Jeep, and Chrysler, covering a wide market. Stellantis is investing heavily in electrification through its 'Dare Forward 2030' Global Strategy, aiming to significantly increase the sales proportion of pure electric vehicles before 2030, with a target of achieving 100% pure electric passenger vehicle sales in Europe.
The demand for lithium is performing strongly, with battery factory capacity utilization remaining high.
1) End Demand: On one hand, the sales of new energy vehicles are supported by policies, showing strong demand. According to reports from the Financial Association's Baijiahao, the vice secretary general of the China Automobile Manufacturers Association, Chen Shihua, anticipates that China's new energy vehicle sales in 2024 may reach 12 million units. On the other hand, according to the Weber Consulting Sohu account, in 2024, the global energy storage installation demand is expected to be 155 GWh, representing a 53% year-on-year increase, with overseas large-scale energy storage maintaining a high level of prosperity and Europe’s household storage growth rate recovering.
2) Battery Manufacturers: Taking Contemporary Amperex Technology as an example. According to the investment relations activity record of Contemporary Amperex Technology on October 18, 2024, their overall sales volume in the first three quarters approached 330 GWh, with a quarter-on-quarter increase of over 15% in Q3 of 2024, and the energy storage ratio exceeding 20%. Additionally, in the third quarter, the battery capacity utilization rate of Contemporary Amperex Technology has become relatively saturated, with a sequential increase of over 10 percentage points, and further improvement is expected in the fourth quarter.
Risk Warning: Lithium battery demand falling short of expectations, decline in battery manufacturers' operating rates, changes in the international environment, etc.
