Credit Suisse reported that for the first time, the bank covered China Chuang Sina Airlines (03931), China's leading electric car battery company, with a "outperform" rating and a target price of HK $36. The bank believes that strong downstream demand growth will lead to a rebound in profit margins and further gain market share. At present, the concentration of China's battery industry continues to rise; the top 2-5 companies achieved about 40 per cent of the market share in 2020-2022 (about 30 per cent in 2019). Sinotrans's current market share in 2022 is estimated to be 8 per cent, with a utilization rate of 89 per cent. It is expected that these market share trends will continue to improve as manufacturers tend to diversify their suppliers to obtain a flexible supply chain structure. In addition, battery profit margins are expected to pick up as raw material prices fall.

The bank continued that the rapid growth in lithium demand in 2021 caused the market to outstrip demand, pushing up lithium prices. The bank believes that the market should return to equilibrium in 2023-24 and spot prices will peak and fall steadily. The loosening should allow profit margins to be transferred downstream to other sectors of the battery industry. Price increases will be passed down the supply chain to OEMs, who will have to raise prices or accept reduced profits.

In 2021, sales of electric vehicle battery products in Sinovel climbed to 9.31GWh from 1.62GWh in 2019, with a compound annual growth rate of 139.7%. With the release of new capacity, the company will benefit from a higher level of economies of scale. The company expects its effective production capacity to be expanded to about 35GWh/90GWh in 2022 / 23. In addition, Sinovel has become a supplier of electric vehicle batteries for well-known new energy vehicle brands such as GAC EAN and Changan New Energy. The rapid expansion of Sinovel is expected to have a synergistic effect with its solid customer base.