Guosen: The lithium battery industry chain continues to see high production growth, with the upcoming CIBF exhibition driving new technology directions.

Guosen releases research report stating strong demand performance, with continuous high production in the lithium battery industry chain. Energy storage demand continues to improve, combined with rapid growth in exports of electric vehicles and continuous increase in single electric vehicle battery capacity, maintaining high-speed growth in lithium battery demand. In May, a total of 6 companies in the lithium battery sector had a combined production capacity of approximately 164.6GWH, an increase of +57% year-on-year and +8% month-on-month, indicating continued high industry prosperity. Additionally, new battery technologies such as solid-state batteries and sodium batteries showcased at the CIBF exhibition in May are expected to see continuous catalyzation. Guosen's main points are as follows: Global energy storage demand is steadily increasing, with systems and PCS accelerating overseas expansion. The domestic energy storage capacity and electricity price policies have been put in place, driving market demand and leading to an explosive growth in domestic energy storage orders; the development of data centers in the United States is pushing up demand for large energy storage systems; rising natural gas prices in Europe and the development of market-driven electricity prices are both driving energy storage demand; various emerging markets have frequent energy storage policies, and global energy storage installation demand is expected to reach 455GWh by 2026, an increase of +40% year-on-year. Wind power exports contribute to revenue growth, with increased wind power tenders in Europe. Domestic demand is stable with a slight increase, as China continues to promote the integration of renewable energy and the development of the green fuel industry, with new wind power installations in China expected to grow by 10%-20% in 2026. The implementation of overseas offshore wind power projects is accelerating, and the UK government recently announced the launch of a new round of offshore wind CfD bidding (AR8) in July of this year, with up to 18 offshore wind projects expected to participate. Europe's strategic layout of improving energy security and green development through offshore wind power development is expected to strengthen opportunities for domestic pile casing and subsea cable projects, with opportunities for domestic bearings, gearboxes, and other sectors to further expand into the Western European onshore wind power market. In 2025 and Q1 2026, wind power and power transmission and transformation are more favorable, while the lithium battery sector continues to recover. In 2025, profitability in the photovoltaic component and silicon material sectors is under pressure, with component gross profit margin recovering in Q1 2026 but still experiencing losses, and silicon material sector profits remaining under pressure; strong performance in inverters in 2025 and differentiated performance in Q1 2026; revenue growth in wind turbine units in 2025 but profits affected by low-price orders, with high revenue and profit growth in Q1 2026; improved profit growth in power transmission and transformation in 2025, with revenue recovery in Q1 2026; high growth in shipments and price recovery in the lithium battery sector in 2025, with continued growth in shipments and revenue in Q1 2026. Risk warnings: Risks of policy changes; rising prices of raw materials such as oil, copper, and aluminum leading to increased production costs; electric vehicle production and sales below expectations.