Understanding the Market | The lithium battery sector leads in gains, Morgan Stanley issues a research report optimistic about CATL, institutions say the market is focused on lithium demand expectations for next year
The lithium battery sector performed strongly, with Zhongxin Innovation rising 8.59%, CATL rising 4.9%, Ganfeng Lithium rising 3.79%, and TIANQI LITHIUM rising 3.57%. A Morgan Stanley report pointed out that CATL's breakthroughs in the European market and the profitability challenges faced by competitors will solidify its leading position, making its valuation attractive. CITIC Construction Investment believes that the lithium battery sector has realized the demand expectations for 2025, and attention should be paid to the demand growth rate for 2026 and related policies
According to the Zhitong Finance APP, the lithium battery sector is among the top gainers. As of the time of writing, CATL (03750) rose by 8.59% to HKD 29.06; CATL (03750) increased by 4.9% to HKD 454; Ganfeng Lithium (01772) climbed by 3.79% to HKD 35.06; TIANQI LITHIUM (09696) went up by 3.57% to HKD 41.22.
On the news front, on September 11, Morgan Stanley released a report stating that as CATL makes breakthroughs in the European market, smaller competitors are struggling to achieve profitability in the critical energy storage sector. Additionally, the currently popular solid-state battery technology is viewed as a short-term speculation. CATL's leading advantage will continue, and its valuation is significantly attractive among peers, making it "the cheapest in the industry."
CITIC Securities believes that the lithium battery sector has already realized the logic of exceeding market demand expectations for 2025. The current core contradiction in the sector has shifted to whether the demand expectations for 2026 can be further revised upward based on a 20% growth rate. Future attention will focus on three major signals: first, the energy storage bidding situation in the fourth quarter, which will reflect the installation data for 2026; second, the battery companies' bidding at the end of November corresponding to the demand expectations for 2026. Although some battery companies have already provided guidance for 2026 that significantly exceeds market expectations, the confidence level is still questioned, and future negotiations based on price will have credibility; third, the continuation of policies such as vehicle trade-ins for 2026 and lithium battery production scheduling information. Despite significant expectation gaps currently, the economic-driven energy storage exceeding expectations may accelerate next year, and a second wave of market activity could emerge at any time with increased attention
