Dongxing Securities released a research report saying that after the lithium battery sector underwent bottoming adjustment in 2023, the profitability of each link bottomed out, the pattern continued to clear, and the midstream materials link also went through a complete downward stage of the inventory cycle. The sector prosperity has gone through the worst moment and is expected to continue to warm, the pessimistic expectations for the fundamentals have gradually eased, and the performance of the sector at the current point in time has stabilized and is elastic, with a certain allocation value.

The main views of Dongxing Securities are as follows:

Opportunities for fundamentals to return in the context of an improving pattern

Battery link: due to the high degree of customization on the demand side brings strong bargaining power, in the current raw materials and inventory double low operation background, the profitability of the battery link is stable, it is expected that the profit of the sector will still maintain an upward trend in 25 years, and the trend of profit differentiation in the sector will continue, leading enterprises with differentiated product premium + overseas business incremental contribution, the trend of profitability improvement continues to lead the second-tier manufacturers, it is recommended to pay attention to the overseas layout of the leading peers, European and American production capacity is about to enter the harvest period of Guoxuan Hi-Tech ( 002074.SZ), the industry leader CATL (300750.SZ), which continues to expand its profitability advantage with its leading manufacturing capabilities + differentiated product premiums, will also benefit extensively.

Material link: Although at the profit level, some enterprises in the lithium battery industry chain are facing declining profit margins and low production capacity profit margins, with the continuous production capacity clearance and new product iteration, the concentration of lithium battery materials will be further improved, and the profit level is expected to return. At the same time, the upward integration of ternary links is difficult and the downward bargaining power is weak, while the upstream precursor upward layout of raw materials is progressing smoothly and the industry concentration is constantly improving, based on the competitive pattern and cost reduction progress, it is expected to distribute more industrial chain profits in the future, and CNGR (300919.SZ) is expected to benefit. Negative electrode: The core competitiveness comes from the cost and self-supply rate of artificial graphite, and low cost is a powerful weapon in the process of capacity clearing, and enterprises such as Shangtai Technology (001301.SZ) are expected to benefit.

Opportunities to accelerate the industrialization of new technologies

Solid-state battery: The industrialization process of solid-state battery has been accelerating, and solid-state battery technology is still one of the potential catalysts of the sector in 2025. CATL, which has mass production capacity for automotive-grade applications, is also a potential beneficiary.

In terms of battery materials, in the long term, in addition to the electrolyte, the positive and negative electrodes in the all-solid-state battery industry chain are all beneficiary links, and the positive electrode is from high nickel to high voltage, or new systems such as lithium nickel manganese oxide and lithium-rich manganese base are iterations, and the relevant beneficiary targets are Rongbai Technology (688005.SH), Dangsheng Technology (300073.SZ), etc.; The negative electrode is iterative from graphite to lithium metal anode, and the relevant beneficiary target is beiteri (835185.BJ); At the electrolyte level, the solid-solid interface between the solid electrolyte and the positive and negative electrodes is in contact with each other, with a small contact area and poor tightness, and related auxiliary materials such as carbon nanotubes that improve conductivity are expected to benefit. The relevant beneficiary targets are Tiannai Technology (688116.SH), Dow Technology (300409.SZ), etc.

High-voltage fast charging: fast charging battery technology is relatively mature and meets the current pain points of energy replenishment demand, the price of high-voltage fast-charging models has gradually increased during the year, and the price of some high-voltage fast-charging models has dropped to below 200,000 yuan, 24 years has become the first year of high-voltage fast charging volume, and the products with high-voltage fast-charging performance in the battery link are expected to obtain excess profits brought by differentiated competitive advantages.

In terms of battery materials, the continuous improvement of the demand for fast charging performance will usher in the upgrading and innovation of many materials, such as the upgrading direction of the negative electrode, such as multiple granulation and surface carbon coating, etc., and the main beneficiary target is Xinde New Materials (301349.SZ); The increase in the amount of conductive agent can improve the overall fast charging efficiency of the battery, and the new conductive agent carbon nanotubes have better performance, which is expected to replace the traditional conductive agent, and the main beneficiary is Tiannai Technology (688116.SH); The stability and chemical stability of the new lithium salt LiFSI have obvious advantages over the current mainstream lithium salt LiPF6, which can meet the requirements of high conductivity and safety stability of fast charging performance, and the main beneficiary is Tianci Materials (002709.SZ).

Investment suggestion: In 2025, the fundamental return opportunities under the continuous improvement of the supply and demand pattern of the lithium battery sector and the continuous interpretation of the industrial application of many new technologies will be the main driving force for the rise of the sector.

Risk warning: the growth of the demand side is less than expected, the intensification of industry competition is more than expected, the company's cost/profit improvement is less than expected, the impact of overseas policies/geopolitics is higher than expected, and the industrialization process of new technologies is less than expected.