Goldman Sachs: China's battery industry demand to grow at least 20% in 2027; ZENERGY (03677) rated "Buy"; CALB (03931) rated "Neutral"

Goldman Sachs released a research report stating that the recent Battery Industry Day held in Shenzhen and third-quarter results show that China's battery industry holds an optimistic demand outlook for 2027, with overall growth of at least 20%, among which energy storage system (ESS) demand growth reaches over 30%; the bank assigned a "Buy" rating to ZENERGY (03677) and a "Neutral" rating to CALB (03931). The report noted that despite short-term pressure from the reinstatement of consumption tax and the cancellation of export VAT rebates, most battery manufacturers have gradually passed costs on to customers, with the transition expected to be completed in the first quarter of 2027. Regarding CALB, the consumption tax on energy storage has been largely passed through, and the negative impact in the fourth quarter should be largely eliminated; pass-through for power batteries remains challenging, with management expecting September to be the peak of the impact, but the issue will be resolved by the first quarter of 2027 at the latest. The company also expects gross margin to improve significantly next year, driven by the transition and ramp-up of new capacity and a higher contribution from high-priced products. REPT BATTERO (00666) expects shipments to reach over 140GWh in 2027, a year-on-year increase of at least 30%, of which 60% comes from ESS. Management targets a gross margin of over 15% and believes that industry capacity expansion is subject to policy control, with no oversupply expected. ZENERGY was rated "Buy" on its growth potential as an emerging battery platform. The company expects shipments to grow at least 50% year-on-year in 2027, mainly driven by customers such as LEAPMOTOR (09863) and Toyota. Management also plans to expand ESS capacity. Overall, the bank believes that after the transition through cost pressure, the battery industry chain will benefit from overseas ESS, AI data centers (AIDC), and commercial vehicle electrification, and that the industry supply-demand landscape is expected to improve in 2027, with high-end capacity in particular remaining tight.