Citigroup: The rise of the battery supply chain has been largely reflected, and we recommend choosing defensive targets such as Contemporary Amperex Technology (03750) first.

Citigroup released a research report stating that the recent increase in the battery supply chain driven by strong Energy Storage Systems (ESS) expectations has largely been reflected, and it suggests that investors should maintain a cautious optimistic attitude before the Lunar New Year. The bank believes that defensive targets such as Contemporary Amperex Technology (03750) should be chosen in the first quarter of next year, as the prospects of production lines are uncertain due to seasonal factors and weak demand for electric vehicles. The bank's short-term preferred target is Contemporary Amperex Technology, with a target price of 621 Hong Kong dollars for H shares and 571 Chinese yuan for A shares of Contemporary Amperex Technology (300750.SZ). However, the bank believes that the growth prospects of batteries, especially energy storage systems, will remain unchanged in the next 12 months, and it is optimistic about battery-related enterprises with higher elasticity entering the traditional peak season (March and April), such as lithium, separators, electrolytes, positive electrode materials, and second-tier battery manufacturers with a higher proportion of energy storage business, as seasonal supply-demand mismatches in the battery value chain are expected.