Consumer battery boom is increasing, and demand for power storage batteries is strong
On the consumer side, demand in the traditional consumer battery market will recover in 2024, and the AI wave is expected to accelerate the consumer electronics renewal cycle. We expect global mobile phone/PC/ tablet battery demand to reach 27.3GWh/21.6 GWh/4.1 GWh respectively in 2026, with a three-year CAGR of 8.8%/10.2%/8.0%; in terms of power, the installed capacity of global power batteries will reach 707.2 GWh in 2023, +42.0%; in terms of energy storage, new energy storage projects will be added domestically in June 2024 The total scale was 5.4 GW, +21% year-on-year, and the new operation scale reached a new high since 2024. The downstream boom in power/energy storage/consumer batteries continues to rise, providing space for the company's business development.
Consumer business: The self-supply rate of batteries continues to increase, increasing the company's profits Consumer batteries are the company's traditional core business. In 2018, the company's self-supply rate of consumer batteries was 9.52%, and by mid-2021, it was 27.39%. In 2022, the self-supply rate of the company's mobile phone cells was 30%. Currently, the self-supply rate of the battery cells in the company's consumer business is still gradually increasing. As the company's self-supply rate of consumer batteries continues to increase, the company is expected to further increase its market share and core competitiveness, and increase the company's profits. In addition, the company's next-generation fast-charging PC batteries are expected to continue to increase its market share in the laptop market; the company's silicon anode consumer batteries have a 5-10C fast charging capability.
Power business: The integrated layout combined with increased market share and utilization rate shows the company's potential. In 2024, the company's share of power battery loading continued to increase. In June 2024, the company's domestic NEV loading volume rose to fourth place, with a share of 3.4%. In 2024, the company added some new models for Ideal and Geely customers. Car companies such as Volvo and Volkswagen have been added overseas. It is expected that the company's shipment volume and market share are expected to increase further. As the operating rate increases dilution costs, the company's power battery business is expected to turn a loss into a profit. At present, the company's HEV business has clearly increased. The new product, the flash battery, is developing smoothly, and the performance is leading the market. In addition, the company has a layout in the upstream cathode process and downstream battery recycling process, etc., so cost reduction and profitability are guaranteed.
Profit forecasting and investment advice
The market share of the company's power business increased, and the battery operation rate continued to increase; the consumer business benefited from market recovery combined with the AI wave, and the continuous increase in the company's battery self-supply ratio. We expect the company's 2024-2026 revenue to be 57.737/66.531/75.954 billion yuan, respectively, up 20.63%/15.23%/14.16% year on year; net profit to mother was 1.675/2.04/2.47 billion yuan, respectively, up 55.60%/21.82%/ 21.10%, corresponding PE is 18/15/12 times, EPS is 0.90/1.10/1.33 yuan/share, respectively, and a three-year CAGR of 31.9%, giving a “buy” rating.
Risk warning: NEV sales fall short of expectations; raw material prices fluctuate greatly; risk of deviations in industry size estimates.