With the basic completion of destocking in the downstream of consumer electronics, it is expected that the subsequent consumer battery industry will usher in a recovery.
The Smart Finance APP learned that Guosheng Securities released a research report, stating that lithium batteries can be divided into cylindrical lithium batteries, square lithium batteries, and polymer soft pack lithium batteries according to the packaging form, and polymer soft packs are more suitable for consumer scenarios. According to EVTank data, smart phones and laptops are the two largest application markets for small soft pack batteries, accounting for nearly 50%. Due to the 3.2% and 13.9% year-on-year decline in global shipments of smart phones and laptops in 2023, the global shipments of small soft pack lithium-ion batteries in 2023 decreased by 2.6% to 5.48 billion units. With the basic completion of destocking in the downstream of consumer electronics, it is expected that the subsequent consumer battery industry will usher in a recovery.
Zhongsheng Securities' main points are as follows:
The top three companies in the global shipment of small soft pack lithium batteries in 2023 are ATL, Zhuhai GY, and Ganfeng Electronics. It is expected that the share of domestic companies will continue to increase in the future.
Looking at the competitive landscape of small soft pack lithium-ion batteries in 2023, ATL under TDK ranked first with shipments of over 1.3 billion units, Zhuhai GY rose to second place globally, and Ganfeng Electronics achieved a rapid rise in ranking through large shipments of TWS, e-cigarettes, and smart wearable batteries. In addition, the top ten companies in the world also include LGES, LVP, Eve Energy Co.,LTD., Haopeng Technology, Zijian Electronics, BYD, and Zhongshan Tianmao.
As Japanese and Korean companies gradually withdraw from the consumer battery market, it is expected that the market share of domestic manufacturers will continue to increase. It is estimated that the demand for consumer lithium batteries in 2024 will be 123GWh, an 8.8% year-on-year increase. The demand for lithium batteries is expected to be 165GWh in 2028, with a CAGR of 7.9% from 2023 to 2028.
In the traditional consumer electronics field, the annual growth rate is relatively stable.
Smartphones: In 24Q2, smartphone shipments increased by 6.5% YoY, achieving positive growth for four consecutive quarters. The development of GenAI function is expected to drive continuous growth in the global smartphone market. IDC predicts that the global smartphone shipment growth rate will be 4% in 2024, and the CAGR from 2024 to 2028 will be 2.3%. Laptops: After experiencing eight consecutive quarters of YoY decline, the first two quarters of 2024 achieved YoY growth, with a 3.0% increase in 24Q2 shipments. It is expected that AIPC will drive simultaneous increase in sales volume and price.
IDC predicts that the global laptop shipment growth rate will be 2.0% in 2024, and the CAGR from 2024 to 2028 will be 2.4%. Tablets: Thanks to the arrival of the product replacement cycle, global tablet shipments in 24Q2 increased by 22.1%, with Huawei and Xiaomi both experiencing 40% and 95% growth, respectively.
Emerging areas of consumer electronics: AR/VR, portable energy storage, electric two-wheelers, and low altitude economy have great growth potential.
Wearable devices: In 2024Q1, global wearable device shipments reached 0.113 billion units, an increase of 8.8% YoY. IDC predicts that the wearable device shipment growth rate will be 10.5% in 2024, and the CAGR from 2024 to 2028 will be 3.6%. The CAGR of VR and AR shipments is expected to be 29.2% and 87.1%, respectively. Portable energy storage: The CAGR of global portable energy storage shipments and market size from 2016 to 2021 is 148% and 184%, respectively. With the increase in outdoor participation and the growing awareness of disaster preparedness among residents, the portable energy storage market will develop rapidly. Electric two-wheelers: In 2022, global electric two-wheeler shipments reached 87 million units, an increase of 13.6% YoY. However, due to fluctuations in lithium carbonate prices and the impact of the shared market, sales of lithium-ion two-wheelers reached 27.35 million units with a YoY decrease of -0.8%. It is expected that the penetration rate of lithium-ion batteries will gradually increase in the future.
Power tools: In 2022, global power tool shipments reached 0.47 billion units, a YoY decrease of 19.3%. Electric garden tools were the only segment of electric tools that experienced YoY growth in 2022. EVTank predicts that the CAGR of global electric tools shipments and market size from 2022 to 2026 will be 10.9% and 11.3%, respectively.
Low altitude economy: This year, the low altitude economy was mentioned in the government work report for the first time. As of the end of March 2024, there were a total of 0.069 million enterprises related to the low altitude economy in China, with more than 1,600 new additions in 24Q1. EVTank predicts that the global eVTOL fleet will reach 26,000 aircraft by 2035, with a cumulative market size of 160 billion USD.
Investment advice: Traditional sector: With the basic completion of destocking in the consumer electronics downstream and the increase in demand for traditional product replacements driven by AI applications; Emerging sectors: AR/VR, portable energy storage, electric two-wheelers, drones, and other emerging fields are developing rapidly, which will drive a surge in consumer battery demand; Increase in domestic market share: With Japanese and Korean companies gradually withdrawing from the global consumer battery market, the market share of domestic manufacturers is expected to continue to increase. It is recommended to pay attention to Sunwoda Electronic (300207.SZ), Zhuhai Crown Yu (688772.SH), Hao Peng Technology (001283.SZ), and Jiangsu Azure Corporation (002245.SZ).
Risk warning: The demand for consumer batteries may not meet expectations, there is a risk of fluctuating raw material prices, and model calculation risks.
