Guolian Minsheng Securities: Negative industries are expected to turn upward, and cost is the decisive factor.

Guolian Minsheng Securities released a research report stating that the anode material is one of the four key main materials in lithium batteries, and its price cycle has reached a low point, with profits expected to stabilize and rise. The anode industry is expected to reach a tight supply-demand balance in 2026H2-2027, and the anode material is expected to increase in price, transmitting cost pressure, with industry profits expected to stabilize and rise. Cost is the decisive factor, improving the self-supply rate of graphite, advancing integrated production capacity construction, smoothing out the impact of processing fee fluctuations, becoming the main trend for anode companies to reduce costs, and enterprises with high self-supply rates of graphite have significant cost advantages. The main points of Guolian Minsheng Securities are as follows: The anode is one of the key main materials of lithium batteries, promoting fast charging and pursuing high cost performance. The anode material is one of the four key main materials in lithium batteries, accounting for 10%-15% of the total cost of lithium batteries. Currently, synthetic graphite occupies an absolute dominant position, with synthetic graphite accounting for 92.7% of the total shipment volume of anode materials in 2025. In the production process of synthetic graphite anode materials, graphitization is a key link. The development of anodes shows the following trends: 1) the trend of fast charging is universally popular, becoming a standard product for synthetic graphite in the power end; 2) pursuing high cost performance, differentiation in the anode industry structure; 3) silicon-based anodes are breaking through, and are expected to achieve large-scale applications. The price cycle of anode materials has reached a low point, with profits expected to stabilize and rise. 1) 2020-2022H1: Industry upcycle, prices and profits soared due to supply shortage. From 2020 to 2022, driven by the double wheels of power and energy storage, the demand for anode materials increased under high demand for lithium batteries, causing tight supply and demand, resulting in continuous price increases for anodes, and leading companies experiencing rapid revenue and profit growth; the industry's outlook for the market is optimistic, leading to accelerated expansion. 2) 2022H2-2024: Industry downcycle, structural overcapacity leading to sharp price declines. Previous disorderly capital inflows led to structural overcapacity in anodes, with leading companies maintaining high operating rates, while small companies either remained shut down or engaged in subcontracting, resulting in low operating rates; the price of anode materials fell sharply, leading to industry profits declining to losses. 3) 2025-2026H1: Industry operating rates increase, prices stabilize. With high growth in energy storage demands coupled with stable growth in power demand, lithium battery shipments are increasing, driving demand for anode materials; the growth rate of anode production capacity slows down, and capacity utilization rates increase; graphitization processing fees stabilize and rise, and anode material prices reach a low point. 4) 2026H2-2027 outlook: The industry is expected to achieve a tight supply-demand balance. On the demand side, stable growth in power demand coupled with high growth in energy storage demand; on the supply side, the growth rate of production capacity slows down, with limited actual increase in capacity; the anode industry is expected to achieve a tight supply-demand balance in 2026H2-2027, with the possibility of anode material price increases transmitting cost pressures, and industry profits expected to stabilize and rise. Cost is the decisive factor, improving the self-supply rate of graphitization, and continuously reducing costs are key competitive advantages for enterprises. Investment recommendations The anode industry is expected to turn upwards, and it is recommended to focus on 1) Shijiazhuang Shangtai Technology: leading in integration and significant cost advantages; 2) Hunan Zhongke Electric: pioneer in box-type furnaces, strong continuous graphitization capabilities; 3) Shanghai Putailai New Energy Technology Group: cost advantages in the integrated base in Sichuan. Risk warning: Policy outcomes do not meet expectations, intensified industry competition, fluctuations in raw material prices, technology developments falling short of expectations, overseas operational risks, calculation errors, etc.