Sinolink: Breakthrough in solid-state battery technology & explosive growth in energy storage demand, overall optimism in the lithium battery industry chain.

Sinolink released a research report stating that at the current key point of energy structure transformation, the lithium battery industry chain is facing unprecedented development opportunities. Its core DRIVE comes from the resonance between technological revolution and market demand. In terms of technology, the substantial breakthrough of solid-state battery technology is reconstructing the industry ceiling. In terms of the market, the explosive growth of the global energy storage market is providing lithium battery industry with capacity space beyond expectations. Technological breakthroughs and demand explosions form a positive cycle, with energy storage systems highly sensitive to cycle life and cost, precisely the next stage goal that solid-state battery technology can solve on a large scale; while the huge application scenarios and fund inflows provided by the energy storage market, in turn, accelerate the research and industrialization process of cutting-edge technologies such as solid-state batteries. The lithium battery industry chain is expected to undergo value revaluation in this wave. Sinolink's main points are as follows: Lithium Battery: Prosperity resonating with new technology, presenting diversified investment opportunities By 2025, the breakthrough of solid-state battery technology will drive industry Capex acceleration, overlapped with continuous supply-side reform and capacity convergence from 2023 to 2025. The prosperity of energy storage may exceed expectations, and the industry supply and demand pattern may start to reverse. Prices are rising in multiple links, and the prosperity of the industry chain is diversified. Cycle: In 2024-2025, the midstream of the lithium battery industry will enter the "recovery-prosperity" stage, corresponding to sector replenishment. Since the industry touched bottom in the first quarter of 2024, both revenue and inventory have been on an upward trend, with the lithium battery sector inventory cycle entering the "prosperity" stage in the third quarter of 2025. Growth: Resonance between new technology and new scenarios, lithium batteries entering the second growth pole. New technology is the main theme of the sector, with solid-state batteries as a long-term technological direction of significant strategic importance, reshaping the process and material systems, starting solid-state pilot lines from 2025 and gradually transitioning to mass production lines, with the route/supply chain becoming gradually clearer. Composite copper foil as a disruptive technology, after years of technological breakthroughs and polishing, is expected to see true industrialization by the second half of 2025, with production pace, penetration space, and applications in solid-state batteries likely to exceed market expectations. In addition, new scenarios will foster future growth poles, such as data centers, low-altitude economy, humanoid Siasun Robot & Automation, and going international, stimulating new demand in new areas. As the core business of lithium batteries stabilizes, sector companies will lay out a second growth curve. Pattern: Leading products and competitive cost advantages are obvious, and the industry will maintain a trend where the industry's best capacity utilization rate is filled first, with the most certain performance realization and highest flexibility. With the lithium battery upstream and downstream entering a new turning point in the second half of 2025, lithium hexafluorophosphate, energy storage batteries, and separators in the high-price path deserve attention. November Industrial Chain Pre-production Situation Tracking: Domestic battery sample companies: 144.14 GWh; a month-on-month increase of +1.76%. Overseas battery sample companies: 24.4 GWh; month-on-month flat. Cathode materials: 176,600 tons; a month-on-month increase of +7.35%. Anode materials: 155,000 tons; a month-on-month decrease of -1.89%. Separators: 1.89 billion squares; a month-on-month increase of +3.56%. Electrolyte: 107,000 tons; a month-on-month increase of +8%. Investment recommendations: Categorize the lithium battery sector's 20 sub-sectors based on new technologies, new scenarios, and traditional core categories, and at the current point in time, focus on the following main themes: 1) Large-scale solid-state battery production lines/building pilot lines of solid-state batteries, targeting core equipment and materials; 2) New solid-state battery technologies, such as lithium metal cathodes, dry electrodes, lithium sulfide, etc.; 3) Sub-sectors in the price hike, such as lithium hexafluorophosphate, energy storage batteries, separators, anodes, etc.; 4) Data center demand boom, core suppliers of energy storage, BBU, and UPS batteries; 5) Sodium-ion batteries increase in energy storage and electric vehicle applications, targeting batteries and materials. Lithium Metals: Energy storage demand explodes, industry may face a turning point Short-term: The lithium market is running at high supply levels, with demand showing stronger performance. The growth in new energy vehicles and energy storage sectors is driving material demand. Upstream inventories have reached low levels, with the market showing a destocking pattern. With low inventory and strong demand support, lithium carbonate prices are expected to remain strong in the short term. Medium to long term: Domestic independent energy storage and overseas AI energy storage demand continue to grow rapidly, with monthly demand remaining above 120,000 tons. Monthly destocking will reach 8,000-10,000 tons, providing continued price support. The 2026 energy storage demand growth rate expectation has been raised, improving the industry supply and demand pattern, with the speed of monthly destocking likely to accelerate, and prices are expected to rise under strong demand support and rapid growth expectations. Risk warning: Disruption caused by US tariffs leads to demand and profit below expectations; new energy industry demand below expectations; energy storage market demand below expectations; industry chain production improvement and operating rate increase below expectations; risks of sanctions by European and American policies; risks of rising raw material prices; risks of slower-than-expected progress in new technology.