Shenwan Hongyuan released a research report stating that the downstream lithium battery sector is witnessing the gradual popularization of new energy passenger vehicles in the power segment and a construction boom period driven by grid parity for solar-plus-storage. As a leading company in the lithium battery industry, ZENERGY (03677) is expected to fully benefit from the value creation of its lean manufacturing while continuously increasing its market share. The company is actively developing new customers and models in the power battery field, and its energy storage cell production is poised for volume ramp-up. The scale effect is anticipated to become increasingly evident after the volume shipment of power and storage cells in the future. The institution forecasts the company's net profit attributable to shareholders for 2025-2027 to be RMB 5.4 billion, RMB 12.1 billion, and RMB 18.4 billion, respectively, corresponding to P/E ratios of 36x, 16x, and 11x based on the closing price on December 24th. It assigns a 2026 P/E valuation of 20x (in line with the average valuation of industry peers) to the company, initiating coverage with an "Outperform" rating. Shenwan Hongyuan's key views are as follows:

Strategically focused on "Land, Sea, and Air Interconnection," multi-dimensional layout drives high-quality growth. Since its establishment in 2019, the company has progressed through phases of technological accumulation, capacity expansion, and customer development, now entering a rapid development period characterized by breakthroughs in quality and efficiency. Leveraging its "Land, Sea, and Air Interconnection" strategy, its product portfolio covers power batteries, energy storage, and aviation batteries. Notably, the company has pioneered the airworthiness certification and mass production delivery of aviation-grade power batteries. At the governance level, the company has established a stable ownership structure characterized by "founder leadership, state-owned capital empowerment, and industrial capital synergy." The core team possesses profound industry expertise and international management experience, laying a solid foundation for long-term development. In the first half of 2025, the company's revenue reached RMB 3.17 billion, a year-on-year increase of 71.9%, and it achieved a net profit of RMB 220 million, successfully turning a profit. The gross profit margin improved to 18%, demonstrating a positive trend of scale effect realization and enhanced profit resilience.

Dual drivers of power and storage in a high-growth phase, optimized supply and demand usher in a new battery profit cycle. Downstream, the new energy vehicle and energy storage markets continue to exhibit strong growth. The domestic electrification process is deepening, with new energy vehicle sales reaching 11.2 million units in the first three quarters of 2025 and the penetration rate climbing to 46%. The acceleration of commercial vehicle electrification, coupled with increasing battery capacity per vehicle, further boosts demand for power batteries. Overseas markets contribute significant incremental demand, driven by policy incentives in Western Europe and the gradual expansion of products in emerging markets, collectively fueling global demand growth. The energy storage sector shows robust growth, with global energy storage battery shipments projected to surge from 530 GWh in 2025 to 1,343 GWh in 2028, becoming a new engine for lithium battery demand. The lithium battery industry is entering a cycle of improving supply-demand dynamics, with the competitive landscape showing a trend of "dominance by leading players alongside diversified progress." Against this backdrop, the company's market share is steadily increasing. It is expected to unlock new space for profit improvement by capitalizing on the industry recovery and its own technological advantages.

Synergy between technological premium and scale effect drives continuous release of profit elasticity. The company has deep partnerships with key customers such as Leapmotor and SAIC Motor, significantly enhancing order visibility. Its capacity planning is precise and forward-looking; after expansion in 2025, total capacity will reach 35.5 GWh and is expected to reach 50.5 GWh by 2027, laying the groundwork for sustained volume shipments. The company excels in lean manufacturing capabilities, with its platform-based systems adaptable to multi-scenario demands. Its differentiated electrochemical system layout covers multiple technology routes, and its product pricing power is expected to steadily improve. In the first half of 2025, the company's power battery shipments reached 7.6 GWh, with scale effects driving continuous optimization of unit costs. As high-end products ramp up, capacity utilization increases, and the customer base diversifies, the company is poised to continuously strengthen its cost advantages and technological premium capabilities in the industry competition, thereby constantly releasing profit growth potential.

Risk warnings: Risk of a sharp increase in raw material prices; Risk of significant product price declines due to intensified industry competition; Risk of overseas trade protection policies.