Cinda's 2025 lithium battery strategy: Inventory and utilization rate cycle resonance, new technology accelerating application.

Cinda released a research report stating that looking ahead to 2025, the lithium battery sector has bottomed out, and core new technologies will begin to scale up. The market needs to factor in inventory cycles on top of demand expectations, and there may be a surplus beyond expectations. The main materials in the lithium battery sector continue to recover. It is recommended to focus on companies such as Contemporary Amperex Technology (300750.SZ), Shenzhen Kedali Industry (002850.SZ), Guangzhou Tinci Materials Technology (002709.SZ), Do-Fluoride New Materials (002407.SZ), Hunan Yuneng New Energy Battery Material (301358.SZ), Shanghai Putailai New Energy Technology (603659.SH), Shijiazhuang Shangtai Technology (001301.SZ), Yunnan Energy New Material (002812.SZ), Fujian Yuanli Active Carbon (300174.SZ), NAKNOR (832522.BJ), Guizhou Zhenhua E-chem Inc. (688707.SH), and others. End market: The automotive sector is experiencing stable growth, and demand for energy storage continues to surge. 1) New energy vehicles: The domestic consumption subsidies in 2024 have had a significant effect, and sales in 2025 are expected to continue, with stable growth expected in Europe and America. It is estimated that global sales of new energy vehicles will reach 21.01 million vehicles in 2025 and 23.63 million vehicles in 2026, with penetration rates of 23.7% and 26.2%, respectively. 2) Energy storage: Demand in China, the US, and Europe resonates, and the Middle East is beginning to grow. It is estimated that energy storage shipments will reach 476Gwh in 2025, a year-on-year increase of 50%. At the same time, it is believed that the first quarter of 2024 marks the turning point for inventory cycles, with the possibility of further increases in apparent shipments. Overall, it is expected that lithium battery demand will reach 1521, 1934, and 2332Gwh in 2024, 2025, and 2026 respectively, with year-on-year increases of 36%, 27%, and 21%. Industry chain: Profitability has bottomed out, and the inflection point for capital expenditures and supply and demand is approaching. Bullish on battery profit certainty and the recovery of hexafluorite and iron lithium processing fees. Inventory cycle: From the perspective of inventory/operating costs, the fourth quarter of 2023 and the first quarter of 2024 are basically the industry's inventory bottoms. Considering the stabilization of upstream raw material prices and robust demand expectations, it may mark the beginning of an upward inventory cycle. Capacity utilization cycle: 1) Capital expenditures: In the third quarter of 2024, fixed assets+construction projects of batteries, electrolytes, negative electrodes, separators, iron lithium, and ternary increased by 10.8%, 15.8%, 29.4%, 24.1%, 13.4%, and 8.8% respectively year-on-year, with overall capital expenditure growth lower than demand growth, except for negative electrodes. 2) Supply-demand balance: It is estimated that the capacity utilization rates for batteries, electrolytes, negative electrodes, and iron lithium in the fourth quarter of 2025 will be around 63%, 87%, 74%, and 80% respectively, with the possibility of recovery for electrolytes and iron lithium. The prices of negative electrodes and batteries are expected to remain stable. New technologies: Bullish on the industrialization of silicon negative electrodes, solid-state batteries, composite flow fields, and sodium batteries. CVD silicon negative electrodes are expected to be commercialized in 2025-2026, with lower costs expected to drive electric vehicles. Bullish on finished product manufacturing and porous carbon processes. The arms race for solid-state batteries is underway, with small-scale batch production expected in 2027 due to domestic subsidies, bullish on dry electrode equipment, sulfides, and zirconium elements. Composite flow field equipment and processes continue to be optimized, with significant potential for cost reduction in the long term, expected to be commercialized in the second half of 2025, bullish on equipment and manufacturing processes. Sodium batteries have unique advantages such as low temperature, and may gradually replace iron lithium in the next three years. It is expected to scale up in 2025 and bullish on the positive and negative electrode hard carbon processes. Risk factors: Industry demand falls short of expectations, intensified competition, lower-than-expected introduction of new technologies, etc.