Contemporary Amperex Technology (03750) Q3 telephone conference: Market share expected to rebound after production capacity is released next year, and in the future will "expand the boundaries of electric vehicles".

Recently, Contemporary Amperex Technology (03750, 300750.SZ) held a Q3 earnings conference call. The company's shipment volume in the third quarter was approximately 180GWh, with 80% for power and 20% for energy storage. The domestic market accounted for 70% of the shipments, while the overseas market accounted for 30%. The company mentioned that this year's market share was slightly affected by production capacity constraints, but with the release of production capacity next year, the market share is expected to recover based on product competitiveness. After the 136 policy for energy storage, the company indicated that both overseas data centers and large energy storage systems, as well as domestic demand, are performing well. The momentum for power also remains high, and there is no need to worry about the impact of purchase tax reduction. The market for Shanxi Guoxin Energy Corporation vehicles has experienced several declines but has shown strong resilience. Commercial vehicles and energy storage are growing rapidly, which will offset short-term fluctuations, and the demand trend is clear until 2030. Driven by the 136 policy, energy storage is outpacing power in growth rate, and market space is opening up. Due to production capacity constraints this year, energy storage deliveries have been limited. After the release of production capacity, both domestic and overseas market share and profits are expected to improve. The increase in the proportion of energy storage system sales has provided some help to net profit, but energy storage currently accounts for only 20% of the total shipments, so it has a relatively small impact on overall data. Regarding production capacity, the factory in Hungary is set to be completed by the end of the year, with equipment testing completed before production. The cost of the Hungarian factory is expected to be 20% lower than that of the German factory, but it will require a period of adjustment to validate this. The German factory is already profitable, and the European factories are expected to achieve good profitability. The advantages of sodium batteries include low cost, good performance in low temperatures, and fast charging, making them suitable for commercial vehicles, passenger vehicles with swappable batteries, start-stop systems, etc. In the future, sodium batteries are expected to expand the boundaries of electric vehicles rather than simply replacing lithium batteries. The company's Q3 shipment volume was around 180GWh, with power accounting for 80% and energy storage for 20%. The domestic market accounted for 70% of the shipments, while the overseas market accounted for 30%. In terms of the current state of inventories, the company clarified that the increase in inventory was due to expanded business operations and pre-stocked products for future deliveries. Despite the absolute increase in inventory amount, the turnover days have remained stable over multiple quarters, indicating that it is within normal inventory cycles. The company also addressed various other questions related to production capacity planning, market demand trends, competition dynamics, battery technology advancements, and the impact of external factors on the industry. Overall, the company remains optimistic about its future prospects and is focusing on maintaining its competitive edge in the market.