Citi: China's battery plan under 15th Five-Year Plan is a long-term positive, but unlikely to drive near-term valuation re-rating

Stock News10-02 14:11

Citi has released a research report stating that under China's 15th Five-Year Plan, the battery plan shifts its focus from capacity expansion to technology, quality, and green compliance, with priority given to solid-state batteries, longer energy storage cycle life, and carbon footprint traceability.

Investor feedback indicates that CATL (03750) and BYD COMPANY (01211) are positioned to benefit from the plan due to their aligned R&D pipelines, strong compliance capabilities, and reinforcement of their duopoly position; second-tier battery makers may face margin pressure and integration risks.

The firm notes that vertically integrated automakers such as GEELY AUTO (00175) and GWMOTOR (02333) have their in-house development strategies validated, while new energy vehicle brands that outsource batteries face mild cost headwinds and need to adjust their solid-state battery timelines.

Although the plan is a long-term positive for the battery industry, the firm believes it is unlikely to drive a near-term valuation re-rating for related stocks, as industry fundamentals remain weak, with September NEV retail sales expected to record a double-digit year-on-year decline.

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