Summary of China Battery Materials Conference Call Industry Overview - The conference call focused on the **China Battery Materials** industry, particularly the production plans for March 2025 among the top battery manufacturers in China. Key Points 1. **Production Surge**: The production pipeline of the top five battery makers is expected to surge approximately **80% YoY** during **1Q25**, with March 2025 production projected to increase by about **9% MoM** to **99 GWh** [1][3]. 2. **CATL's Conservative Approach**: CATL is anticipated to have a more conservative production increase of around **4% MoM** in March 2025, compared to an **18% MoM** increase from other top players. This is attributed to uncertainties in **Energy Storage System (ESS)** demand in both domestic and US markets, as well as a high base effect from previous production levels [1][3]. 3. **ESS Battery Shipments**: In 2024, ESS battery shipments accounted for approximately **23%** of CATL's total shipments, indicating a significant role in their overall business strategy [1]. 4. **Battery Materials Production Growth**: Overall production of battery materials is experiencing strong momentum, with increases of **10-20% MoM** expected in March 2025 [1]. 5. **Top Picks**: The near-term top investment picks identified are **CATL** and **Kedali** [1]. Company-Specific Insights CATL (Contemporary Amperex Technology Co., Limited) - **Valuation**: CATL is valued at **Rmb 362/share**, based on a **17.0x 2024E EV/EBITDA** multiple, which aligns with its historical average since listing. This valuation implies a **30.8x 2024E P/E** and **23.7x 2025E P/E** [7]. - **Risks**: Potential downside risks for CATL's shares include: - Lower-than-expected demand for electric vehicles (EVs) - Increased competition in the EV battery market, potentially reducing CATL's market share - Higher-than-expected raw material costs [8]. Shenzhen Kedali - **Valuation**: Shenzhen Kedali is valued at **Rmb 92.03/share**, based on a **15x 2025E P/E** multiple, which is approximately **1 standard deviation below** its 5-year average. This valuation reflects the overall low sentiment in the battery sector due to demand slowdowns and policy challenges [9]. - **Risks**: Risks that could hinder Kedali's share price from reaching the target include: - Slower-than-expected battery demand - Intensified competition leading to price wars - Rising raw material costs, particularly for aluminum and copper [10]. Additional Insights - The overall sentiment in the battery materials sector is cautious, with many companies experiencing de-rating to levels below historical averages due to demand slowdowns and policy headwinds [9]. - The production forecasts and valuations suggest a competitive landscape where companies like CATL and Kedali are navigating both growth opportunities and significant risks in the evolving battery market [1][9].

19 February 2025 | 9:27PM HKT China Battery Cathode LFP cyclical recovery in sight; initiate on Yuneng at Buy Following our China battery 2025 outlook, we continue to highlight cyclical recovery opportunities in China's LFP (Lithium ferrous phosphate) cathode sector by forecasting utilization to reach 72%/86% in 2025-2026E, from 71% in 2024E. On the demand side, we forecast a 2024-2026E LFP cathode demand CAGR of 34% driven by robust BESS demand and more constructive LFP penetration in the NEV battery marke ...

28 February 2025 | 8:54AM CST Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US ...

We summarize our key takeaways below. Focus on Ads, Games, margin and AI impact Advertising Advertising achieved a solid +24% yoy growth in 4Q24 primarily propelled by strong performance ads (+40% yoy) together with healthy native ads and brand ads (both at double-digit% yoy). Management anticipates advertising revenue to grow at +20% yoy for 1Q25, and are generally optimistic about ad momentum in FY25, in particular: n Management demonstrated confidence on delivering solid performance ad growth, largely at ...

February 28, 2025 09:36 AM GMT China Economics | Asia Pacific Tariffs Prolong Deflation Potential for the US to add another 10% tariff on China on March 4, a narrow pathway to US-China tariff de-escalation, and a modest March NPC fiscal package would likely see deflationary pressures persist. We expect a below-consensus, sub-4% nominal GDP growth from 2Q onwards. Tariff risks are back in focus: US President Trump yesterday said the US would impose another 10% broad tariff on China by March 4 on fentanyl iss ...

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call is on the **China Banking Sector** and its outlook for 2025, particularly regarding dividend yields and asset allocation trends in equities [8][14]. Core Insights 1. **Dividend Yield Trends**: - The dividend yield of the CSI 300 is projected to be **3.1%**, outperforming the **10Y CGB yield** (~1.7%), **3Y bank deposit rate** (1.5%), and **WMP yield** (1.8%). This gap is expected to widen in 2025 [8]. - MSCI China banks and CSI 300 banks are expected to offer **6.2%** and **5.3%** dividend yields respectively in FY25E, indicating a strong dividend spread against the 10Y CGB [8]. 2. **Asset Allocation Shifts**: - A shift of **5 percentage points** in household assets from deposits to equities could lead to an inflow of approximately **Rmb10 trillion**, representing about **13%** of the A-share tradable market [8]. - The banking sector is anticipated to benefit from increased Southbound ownership in H-share banks, providing support to share prices [8]. 3. **Earnings Outlook**: - Stable bank earnings are expected in 2025, with a projected **30bps** cut in LPR leading to a **9bps** contraction in NIM, which is an improvement from **-16bps** in 2024 [8]. - Factors such as improving fee growth, stable loan growth, and asset quality are expected to contribute positively to earnings [8]. 4. **Risk Assessment**: - Stress tests indicate that even if US-export related loans see an NPL ratio of **20%**, the negative impact on earnings would be around **4%** [8]. - The average NPL coverage for China banks is approximately **230%**, which provides a buffer against potential earnings downturns [8]. 5. **Top Picks**: - **CMB** is highlighted as the sector top pick, with a **5.6%** dividend yield in A-shares and **5.5%** in H-shares. It is expected to show revenue and profit recovery in 2025 [8]. - Among the Big 4 banks, **CCB** and **ICBC** are preferred due to their compelling valuations and strong capital positions [8]. Additional Insights - **Regulatory Environment**: - The "China Value-Up" initiatives introduced by the government aim to enhance investor returns and market stability, which could further support the banking sector [26]. - New measures encourage long-term funds to invest in the capital market, particularly in yield stocks, which are expected to benefit disproportionately from rising asset allocations into equities [37][42]. - **Market Dynamics**: - The current asset allocation in households shows a low equity allocation of **7%**, indicating significant room for growth as more funds are directed towards equities [28]. - The anticipated increase in mutual funds' holdings in A-shares by at least **10% annually** over the next three years could lead to substantial inflows into the market [42]. - **Valuation Metrics**: - Valuation summaries for H-share and A-share banks indicate varying P/E and P/B ratios, with CMB-H showing a P/B of **0.98** and a P/E of **7.3x** for FY25E [9][12]. This summary encapsulates the key points discussed in the conference call, focusing on the outlook for the China banking sector, dividend trends, asset allocation shifts, earnings expectations, and regulatory impacts.

1 March 2025 | 6:05PM HKT China Battery and Components Strong March shipments seen (+15% mom); strengthens our cyclical recovery view. Buy CATL (on CL), Yuneng March battery shipments seen beating expectations. According to ICCSino, March 2025 will likely be a surprisingly strong month for China battery shipments, with a mom increase of +15% (Exhibit 1, vs. consensus of single digit). Given Jan-Feb are usually low seasons for battery shipments as a result of Chinese new year holidays, we view the potential ...

February 28, 2025 10:11 AM GMT M Update China Autos & Shared Mobility | Asia Pacific Likely a very "Humanoid" earnings season In the past quarter, 40% of the auto stocks we cover mentioned increasing involvement in humanoid business. As we head towards peak earnings, investors may focus increasingly on the remaining 60% of companies, who, although they have said nothing about humanoids, may soon do so. In addition to the preview note we published on major EV players, here are some quick thoughts about more ...

February 28, 2025 05:25 AM GMT Alternative Asset Mgrs | North America Investor Feedback On Latest Pullback Shares of alts asset mgrs are down -11% over the past 30-days on the back of disappointing 4Q earnings results, slower capital markets activity YTD and macro concerns. We share investor feedback & concerns around capital markets rebound, macro/ interest rates risks, and most & least preferred names. Key Takeaways: | M | | | | --- | --- | --- | | | | Update | | February 28, 2025 05:25 AM GMT | | | | Alt ...

28 February 2025 | 1:53AM PST Anna Wu +1(415)249-7235 | anna.wu@gs.com Goldman Sachs & Co. LLC Alex Lakritz +1(415)249-7072 | alex.lakritz@gs.com Goldman Sachs & Co. LLC | | Mortgage | Credit | Personal | Auto | | --- | --- | --- | --- | --- | | | | Card | Loan | | | Total outstanding ($ in bn) | $12,436 | $1,142 | $148 | $1,675 | | % y/y change | 3.1% | 4.7% | 0.1% | 2.8% | | % m/m change | 1.1% | (0.1%) | 0.0% | 0.4% | | Monthly originations ($ in bn) | $126 | $40 | $10 | $63 | | % y/y change | 29.2% | (6 ...