Citigroup: China's 15th Five-Year Plan for Batteries is beneficial in the long term and difficult to push for a critical evaluation of valuations in the short term

The Zhitong Finance App learned that Citi released a research report saying that the focus of China's battery plan under the 15th Five-Year Plan has shifted from capacity expansion to technology, quality, and green compliance, giving priority to the development of solid state batteries, longer energy storage cycle life, and traceable carbon footprint.

Investor feedback shows that Ningde Times (03750) and BYD Co., Ltd. (01211) can benefit from the plan because their R&D pipeline fits, has strong compliance capabilities, and strengthens their dual oligopoly position; second-tier battery manufacturers may face profit margin pressure and integration risks.

The bank pointed out that the self-development strategies of directly integrated car manufacturers such as Geely (00175) and Great Wall Motor (02333) have been verified, while new energy vehicle brands that buy outsourced batteries face slight cost headwinds and need to adjust their solid-state battery schedules.

Despite plans to benefit the battery industry in the long term, the bank believes that it will be difficult to push for a critical evaluation of relevant stock valuations in the short term. Due to weak fundamentals in the industry, NEV retail sales volume is expected to record a double-digit year-on-year decline in September.