Founder 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, the production scheduling plan of China's power battery companies has increased instead of decreasing, and the momentum of expansion is strong; From the demand side, the domestic installed capacity increased year-on-year, and the penetration rate of new energy vehicles in major countries increased steadily. In addition, the momentum of technological iteration and industrial upgrading in the power battery industry is obvious, and related material manufacturers are expected to benefit.

The main views of Founder Securities are as follows:

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

According to Gasgoo, in 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, and the new power battery production capacity is expected to reach 281GWh. In terms of expansion, leading enterprises led by CATL and BYD are accelerating the expansion of production capacity.

In July 2024, Times Changan, a joint venture jointly funded by CATL, Changan Automobile and its subsidiary Shenlan Automobile, plans to invest 5 billion yuan to build a new 25GWh power battery production base in Gaozhu New Area, Sichuan and Chongqing.

In terms of BYD, in July this year, the company announced that it had signed a contract with the Shenzhen-Shantou Special Cooperation Zone to complete the third phase of the Shenzhen-Shantou BYD Automobile Industrial Park, with an estimated investment of 6.5 billion yuan, and plans to build a battery pack production line and a new energy vehicle core parts factory. Judging from the overall trend, the production scheduling plan of China's power battery companies has increased instead of decreasing, and the momentum of expansion is strong.

In 24Q3, CATL's inventory increased highly, and the capacity utilization rate may continue to increase.

In terms of inventory, in 2024Q3, CATL's 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, which is designed to be fully prepared for the upcoming Q4 sales season. In terms of capacity utilization, in 2024H1, CATL has a battery system production capacity of 323GWh and a capacity under construction of 153GWh, with a capacity utilization rate of 65.33% during the period, compared with +4.83pcts in 2023H1.

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

On the demand side, the 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 2024, the cumulative installed capacity of power batteries in China reached 405.8GWh, a year-on-year increase of 37.6%. Among them, the cumulative installed volume of ternary/lithium iron phosphate batteries was 111.1/294.5GWh, a year-on-year increase of 18.3%/46.7%.

Internationally, according to Markline statistics, from January to September 2024, the cumulative sales of new energy vehicles in the world's 15 major automobile sales countries (accounting for about 90% of global new energy vehicle sales) reached 10.105 million units (accounting for 22.4% of total vehicle sales), a year-on-year increase of 23.2%. We expect China's NEV sales and exports to continue to increase due to the boost to consumption from trade-in subsidies and end-of-life renewal policies, as well as the continued development of NEVs globally.

Investment Advice:

Equipment manufacturers focus on: Pilot Intelligence (300450.SZ), Naconoel (832522.BJ), United Win Laser (688518.SH), Hymson (688559.SH), Xianhui Technology (688155.SH), Jiaocheng Ultrasound (688392.SH), Nebula (300648.SZ), Li Yuanheng (688499.SH).

Material manufacturers focus on: CATL (300750.SZ), Jiayuan Technology (688388.SH), Kedali (002850.SZ), Tianci Materials (002709.SZ), Hunan Yuneng (301358.SZ), Xiamen Tungsten New Energy (688778.SH), Xidian New Energy (603312.SH), etc.

Risk warning: the policy does not meet expectations; intensified competition in the industry; Sales of new energy vehicles declined.