The Zhitong Finance App learned that Fangzheng Securities released a research report saying that as the battery industry restarts capital expenditure expansion, equipment manufacturers will be the first to benefit. Judging from the overall trend, China's power battery companies' production schedules have not declined but increased, and production expansion is strong; from the demand side, domestic installed capacity increased year-on-year, and the penetration rate of new energy vehicles in major countries increased steadily. Furthermore, the power battery industry is showing a clear trend of technological iteration and industrial upgrading, and related material manufacturers are expected to benefit.

The main views of Fangzheng Securities are as follows:

Leading the way, power battery companies are expected to restart and expand production.

According to Geshi Auto, 2024Q3, Chinese power battery companies have invested in 25 new projects at home and abroad, with a total investment of more than 99.1 billion yuan. It is estimated that the additional power battery production capacity will reach 281 GWh. Looking at it, leading companies, led by the Ningde Era and BYD, are speeding up the expansion of production capacity.

In July 2024, “Times Changan”, a joint venture jointly funded by Ningde Times, Changan Automobile and its Deep Blue Auto subsidiary, plans to invest 5 billion yuan to build a 25 GWh power battery production base in the Gaozhu New Area of Sichuan and Chongqing.

On the BYD side, in July of this year, the company announced that it has signed a contract with the Shenzhen-Shantou Special Cooperation Zone to complete the third phase of the Shenzhen-Shantou BYD Automobile Industrial Park project. The project is expected to invest 6.5 billion yuan to build a battery pack production line and a new energy vehicle core component factory. Judging from the overall trend, China's power battery companies' production schedules have not declined but increased, and production expansion is strong.

In the 24Q3 Ningde era, inventory growth was high, and capacity utilization may continue to increase.

In terms of inventory, 2024Q3, Ningde Era inventory reached 55.215 billion yuan, a year-on-year increase of 12.95%. The company's higher inventory levels may reflect its forward-looking stocking strategy aimed at fully preparing for the upcoming Q4 sales season. In terms of capacity utilization, 2024H1 has a battery system production capacity of 323 GWh and a production capacity under construction of 153 GWh. The capacity utilization rate during the period was 65.33%, compared with the 2023H1 capacity utilization rate of +4.83 pcts.

During the 2024Q3 period, the company's battery system shipments were about 125 GWh, an increase of about 15% over the previous month. According to company executives, the company's capacity utilization rate in 2024Q3 is close to saturation, and 2024Q4 is expected to be even fuller. Overall, the company's inventory has increased dramatically, and the capacity utilization rate is also increasing, which may indicate that downstream demand is improving, and it is expected that related demand will also be transmitted to other companies.

Demand side: Domestic installed capacity increased year-on-year, and the penetration rate of new energy vehicles in major countries increased steadily.

According to CABIA, from January to October of 2024, the cumulative load capacity of power batteries in China reached 405.8 GWh, an increase of 37.6% over the previous year. Among them, the cumulative loading volume of ternary/lithium iron phosphate batteries was 111.1/294.5GWh, an increase of 18.3%/46.7% over the previous year.

Internationally, according to Markline statistics, the cumulative sales volume of NEVs in the world's 15 major automobile sales countries (accounting for about 90% of global NEV sales) reached 10.105 million vehicles (accounting for 22.4% of total vehicle sales), an increase of 23.2% over the previous year. Thanks to the boost in consumption from trade-in subsidies and end-of-life renewal policies, and the continuation of the global NEV development process, we expect China's NEV sales and exports to continue to rise.

Investment advice:

Equipment manufacturers focus on: Pioneer Intelligence (300450.SZ), Naknol (832522.BJ), Lianying Laser (688518.SH), Hymo (688559.SH), Xianhui Technology (688155.SH), Jiaocheng Ultrasound (), Nebula (300648.SZ), and Li Yuanheng (US). 688392.SH 688499.SH

Material manufacturers focus on: Ningde Era (300750.SZ), Jiayuan Technology (688388.SH), Kodali (002850.SZ), Tianci Materials (002709.SZ), Hunan Yuneng (301358.SZ), Xiamen Tungsten Xinneng (688778.SH), Xidian Xinneng (603312.SH), etc.

Risk warning: Policies fall short of expectations; industry competition intensifies; NEV sales decline.