: Emerging consumer electronics and AI technology are driving a wave of device upgrades, creating huge potential demand for consumer batteries.

AI2024 Consumer electronic products are the earliest application scenario of lithium batteries. In recent years, with the rapid development of smart wearables, power tools, electric bicycles, and drones, the market size of consumer lithium batteries continues to increase. Emerging consumer electronics and AI technology are driving a wave of laptop and smartphone replacements, creating huge potential demand for consumer batteries. Huajin Securities believes that consumer lithium batteries have high barriers to entry and a good competitive landscape. Chinese battery manufacturers have long-term partnerships with top global customers, and some battery manufacturers are beginning to expand their production capacity globally, further enhancing competitiveness and expanding the market. In 2024, many consumer battery companies will invest in building factories in Malaysia, Vietnam, and other countries to improve their global layout. Consumer batteries are mainly used in smartphones, laptops, smart wearable devices, power tools, and other fields. Lithium batteries with aluminum-plastic film casings have advantages in energy density and flexibility in battery shape, so consumer lithium batteries are mostly packaged in polymer soft packs. Since the release of the world's first commercial lithium battery by Sony in 1991, consumer batteries have undergone more than 30 years of development, and product technology has matured. In 2023, global consumer lithium battery shipments totaled 113.2 GWh, down 0.9% year-on-year. The global consumer lithium battery market has a high concentration, with the cumulative market share of CR5 lithium batteries in global smartphones exceeding 75% in 2022. Emerging consumer electronics and AI technology are driving a wave of laptop and smartphone replacements, creating huge potential demand for consumer batteries. After many years of development, the markets of smartphones, laptops, and other traditional electronic products have entered a stable development period. New areas such as power tools, electric bicycles, drones, are in a rapid development stage. Additionally, with AI technologies such as Chat GPT sweeping the world, companies like Intel, Qualcomm, Lenovo, and many others are investing in AI PCs and AI smartphones. Laptops, smartphones, and other electronic products are expected to usher in a new wave of upgrades, creating huge potential demand for consumer batteries. The 3C consumer battery mainly uses a lithium cobalt acid + soft pack solution. According to the classification of positive electrode materials, lithium batteries are mainly divided into lithium cobalt oxide, lithium manganese oxide, lithium iron phosphate, ternary materials, etc. Lithium cobalt oxide is the mainstream solution for consumer batteries due to its high capacity, high bulk density, and stable cycle performance. In addition, the production processes for consumer lithium batteries mainly include winding and stacking. Among them, stacked batteries have outstanding advantages in energy density, fast charging, and endurance, and are expected to become the mainstream choice for consumer lithium batteries. In 2024, many consumer battery companies will invest in building factories in Malaysia, Vietnam, and other countries to improve their global layout. Investment advice: Consumer electronic products are the earliest application scenario of lithium batteries. In recent years, with the rapid development of smart wearables, power tools, electric bicycles, and drones, the market size of consumer lithium batteries continues to increase. Huajin Securities believes that consumer lithium batteries have high barriers to entry and a good competitive landscape. Chinese battery manufacturers have long-term partnerships with top global customers, and some battery manufacturers are beginning to expand their production capacity globally, further enhancing competitiveness and expanding the market. Key focus companies: Zhuhai CosMX Battery (688772.SH), Sunwoda Electronic (300207.SZ), Eve Energy Co., Ltd. (300014.SZ), and Jiangsu Azure Corporation (002245.SZ), etc. Risk warning: Risks of macroeconomic fluctuations and industrial policy changes; risks of rising raw material prices; risks of product and technology updates; risks of intensified market competition; and other unforeseeable factors.