Shenwan Hongyuan Group: Maintain "Buy" rating on CALB (03931) with 25-year profit forecast exceeding expectations.

Shenwan Hongyuan Group released a research report stating that it maintains a "buy" rating for CALB (03931), with strong downstream demand for lithium batteries and the company's profitability expected to continue to improve. With the upturn in industry demand, the company's profitability is expected to increase after an increase in production capacity. Currently, the demand for lithium batteries in the downstream power side of the new energy passenger vehicle market is gradually increasing, and the energy storage side is experiencing a period of explosive growth in construction due to the increase in photovoltaic energy storage parity. As the company continues to increase its market share, it is expected to fully benefit from its value creation through lean manufacturing. The bank predicts that the net profit attributable to shareholders for 2025-2027 will be 1.38/2.73/4.00 billion yuan, corresponding to PEs of 30/15/10 times. Key points from Shenwan Hongyuan Group: Company's 2025 profit forecast exceeds expectations In 2025, the company forecasts a net profit of 2.025-2.193 billion yuan, a year-on-year increase of 140%-160%. The significant year-on-year increase in net profit is mainly attributed to the continuous high growth of the company's leading technology products in the passenger car, commercial vehicle, and energy storage sectors, as well as the optimization of product structure and strong market demand. The company is establishing a global core battery brand and fully benefiting from core value creation With high growth in shipments from the increase in production capacity, the company's share in the industry is steadily increasing, the customer structure is continuously optimizing, and the company is positioned as the third largest in the domestic power battery field with a 7.0% market share. The company ranked fifth in global energy storage shipments with 612GWh in 2025, according to InfoLink data. The company's commercial vehicle support has continuously made breakthroughs, and in 2025, the company won awards from more than ten industry-leading enterprises such as Sinotruk Jinan Truck, Chery Commercial Vehicle, and Lingong Group. According to the company's official WeChat account, in January 2026, the company's commercial battery deliveries increased by 630% year-on-year, marking a period of comprehensive harvest for the company's market strategy and production capacity layout. In addition, the company's scale effect and refinement management drive cost optimization, the high-end product matrix and technological innovation build premium capabilities, and forward-looking layout such as solid-state batteries continuously enhance global competitiveness. Dual-drive of increased demand and production capacity leads to high industry prosperity, and the company's shipments will maintain high-speed growth With the upturn in industry demand, the current lithium battery downstream power side is accelerating the penetration of new energy in commercial vehicles, and the energy storage side is experiencing a period of explosive growth in construction due to increased photovoltaic energy storage parity. According to HighTech Lithium Battery, lithium battery shipments in China will exceed 2.3TWh by 2026, a year-on-year increase of about 30%, with energy storage lithium battery shipments surpassing 850GWh and power battery shipments exceeding 1.3TWh. Meanwhile, competition in the lithium battery industry will become more concentrated on leading companies, with the company's market share expected to steadily increase. On the supply side, the company's new bases domestically and overseas are gradually being established, and on the product side, a mature product system covering power and energy storage is being built. Currently, the company is continuously developing new customers and new vehicle models in the power sector, and expanding overseas markets for energy storage cells and systems. In the future, after the volume of shipments of power and energy storage cells, the scale effect is expected to gradually become apparent. Risk warning Risks of significant increases in raw material prices; risks of intense industry competition leading to substantial decreases in product prices; risks of overseas trade protection policies.