Soochow EV October Monthly Report: Price Increases Implemented, Profit Recovery, Valuation at Historical Lows

Soochow EV October Monthly Report: Price Increases Implemented, Profit Recovery, Valuation at Historical Lows Soochow released a research report stating that the domestic retail peak season for EVs is not strong, export and overseas demand are growing, and the increase in battery capacity per vehicle supports power demand. Energy storage battery shipments maintain rapid growth, with utility-scale and commercial & industrial storage contributing the main increment. Peak-season demand realization is relatively weak, and the implementation of material price increases is driving differentiated profit recovery. Attention should be paid to battery leaders with stable competitive landscape and material companies with profit recovery elasticity. As of November 3, 2026, some lithium battery leaders trade at approximately 10-12x 2027 PE. Recommendations: Contemporary Amperex Technology (300750.SZ), Eve Energy Co.,Ltd. (300014.SZ), BYD Company Limited (002594.SZ), CALB, Sunwoda Electronic; watch Guangzhou Great Power Energy & Technology. Materials segment recommendations: Shanghai Putailai New Energy Technology Group, Jiangsu Dingsheng New Materials Joint-Stock, Yunnan Energy New Material, Fspg Hi-Tech, Shenzhen Kedali Industry, Shijiazhuang Shangtai Technology, Hunan Yuneng New Energy Battery Material, Guangzhou Tinci Materials Technology, Fulin Precision, Zhejiang Huayou Cobalt, Shenzhen Senior Technology Material, etc.; watch Jiujiang Defu Technology, Nuode New Materials, Guangdong Jiayuan Technology, Do-Fluoride New Materials, Hubei Wanrun New Energy Technology, Jiangsu Lopal Tech. Group, Shandong Hi-Tech Spring Material Technology, Shida Shinghwa Advanced Material Group, etc. Lithium carbonate segment recommendations: Ganfeng Lithium Group, Guocheng Mining, Chengxin Lithium Group, Dazhong Mining, Sinomine Resource Group, Yongxing Special Materials Technology, Tianqi Lithium Corporation, Sichuan Yahua Industrial Group, Zangge Mining, etc. Soochow's main views are as follows: EVs: Domestic retail peak season is not strong, export and overseas demand are growing, and the increase in battery capacity per vehicle supports power demand. From January to September 2026, cumulative domestic NEV sales were 12.472 million units, up 11.1% YoY, of which exports were 4.004 million units, up 132% YoY; cumulative domestic NEV passenger car retail sales were 7.762 million units, down 12.2% YoY. Over the same period, the domestic average battery capacity per vehicle was 66.3kWh, up 28% YoY; the average battery capacity per passenger car was 54.7kWh, up 21% YoY and up 0.7% MoM in September. It is estimated that 2026 domestic NEV sales (including exports) will be 18.41 million units, up 12% YoY, of which exports will be 5.89 million units, up 125% YoY. Cumulative sales in the nine mainstream European countries from January to September were 2.867 million units, up 39% YoY; full-year European sales are estimated at 5.2 million units, up 34% YoY; full-year US sales are estimated at 1.19 million units, down 27% YoY; full-year sales in other countries are estimated at 3.02 million units, up 88% YoY. It is estimated that 2026 global NEV sales will be 22.08 million units, up 5% YoY, with power battery demand of 1,726Gwh, up 21% YoY; 2027 global NEV sales will be 24.88 million units, up 13% YoY, with power battery demand of 2,020Gwh, up 17% YoY. Energy storage: Battery shipments maintain rapid growth, with utility-scale and commercial & industrial storage contributing the main increment. From January to September 2026, global energy storage battery shipments were approximately 837Gwh, up 105% YoY. Domestic utility-scale storage installations and tenders maintained growth, while demand from Europe and emerging markets provided incremental growth. It is estimated that 2026 global energy storage battery demand will be 1,100Gwh, up 71% YoY; 2027 will reach 1,500Gwh, up 36% YoY, of which domestic will be 491Gwh and overseas 1,009Gwh. It is estimated that 2026 global power and energy storage battery demand combined will be 2,826Gwh, up 37% YoY; 2027 will reach 3,520Gwh, up 25% YoY. Production scheduling and prices: Peak-season demand realization is relatively weak, and the implementation of material price increases is driving differentiated profit recovery. From January to September 2026, global power and energy storage battery output was approximately 2,241Gwh, up 52% YoY. It is expected that industry production scheduling in Q4 2026 will be basically flat QoQ, with scheduling momentum weakening phasedly from November to February 2027, and gradually recovering after the Spring Festival. On the profit side, battery companies were affected by tax and fee adjustments and lithium carbonate-related impairment losses; VC average price in Q3 rose to RMB150,000-170,000/ton, spot prices rose above RMB220,000/ton in September, and profits are expected to be further reflected in Q4. Copper foil per-ton net profit recovered to RMB4,000-5,000 in Q3 and is expected to rise to RMB5,000-7,000 in Q4; separator leaders' per-square-meter net profit recovered to approximately RMB0.20/sqm in Q3, Shijiazhuang Shangtai Technology's per-ton net profit in Q3 was approximately RMB2,600, and in 2027, with the increase in graphitization self-supply rate, unit profitability is expected to improve further. Risk warnings: Price competition exceeding market expectations, raw material price fluctuations, terminal demand and industry production scheduling falling short of expectations.