Benefiting from policy protection and the development of the new energy automobile industry, CATL has entered the first echelon of the global market only ten years after its establishment. From 2017 to 2019, it ranked first in the world, with a market share of more than 20%. In the domestic market, CATL With a market share of nearly 50%, it is a well-deserved industry leader. In 2019, its revenue reached 45.8 billion, with a compound annual growth rate of 121% in the past five years. Its customers include well-known domestic and foreign manufacturers in passenger cars, buses, special vehicles and other fields, and its business scope is all over the world.

The explosive growth of enterprises in recent years, in addition to external environmental factors, technology research and development and cost advantages have built the core competitiveness of enterprises. Since 2017, the company’s R&D investment has exceeded 10 billion yuan, and the R&D expense ratio has remained above 8%.

In terms of cost control, the company’s production capacity has increased from 17GW in 2017 to 77GW in 2020, and it is expected to reach 250GW in 2025. The scale effect is obvious. “Through equity participation and joint ventures in upstream mineral resource companies, the purchasing power should be controlled.” It can be said that the Ningde era has developed into a pole in the battery market. Combined with the level of production capacity and capacity utilization, it is expected that under the condition that the market environment remains unchanged and the capacity utilization rate remains at 90%, CATL’s battery system revenue will exceed 170 billion yuan in 2025, which is about 4 times the room for growth. The industrial plan for new energy vehicle sales to account for 20% of the total sales volume has become consistent.

In the long run, under the premise that the market environment does not change, the CATL is still at the foot of the mountain, and the market value in the next five years will surely start at 1 trillion yuan.

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Since its listing in 2018, CATL’s share price has risen 14 times, and its market value has exceeded 800 billion yuan, making it the most promising target in the A-share market in recent years.

To a certain extent, the soaring stock price and the capital boom have concealed the potential risks brought by technological changes and market competition during the growth period of the industry. “The current battery market is mainly ternary batteries and accumulators, accounting for more than 99% of the total, of which the former market accounts for more than 60%.

Potential alternatives include graphite batteries and hydrogen fuel cells, but none of them have been commercialized. Ningde City is currently dominated by ternary batteries, and its explosive growth in revenue in recent years has also come from the high prosperity of ternary batteries.

But from another perspective, the prosperity of ternary lithium batteries also directly determines the performance of the Ningde era. Once the market share of substitutes increases, CATL is bound to be greatly affected. In 2020H1, its shipments will be affected by the increase in iron phosphate market share, and revenue will show a negative growth trend.

In addition, due to the protection of national policies in previous years, international companies such as LG Chem and Panasonic were unable to enter the domestic market, and the pressure of competition in the Ningde era was greatly reduced.

As the policy dividend fades, LG Chem has shown a strong momentum after entering the Chinese market. In 2020H1, the Chinese market share will reach 19%, and the global market share will reach 25%. “Although there were strong technical barriers in the Ningde era, the technical barriers are staged after all, and there are many uncertainties in the process.” Therefore, from the perspective of investors, do not overestimate its future development-Lengshui. To fall down.

| The new energy automobile industry has become an irreversible development trend under the will of the government. It is estimated that there will be 3.6 times the growth space by 2025; the CAGR of per capita consumption expenditure on transportation and communication has reached 10% in the past six years, which is the new energy automobile market The development provides the economic foundation.

At the government level, the state vigorously supports the development of the new energy automobile industry. In the “New Energy Vehicle Industry Development Plan (2021-2035)”, it is pointed out that “by 2025, the sales of new energy vehicles will reach about 20% of the total sales of new vehicles;” by 2035, pure electric vehicles will become new energy vehicles. The mainstream, buses will be fully electrified. “It was pointed out in the “Five-Year Plan for National Economic and Social Development and the 2035 Long-Term Goals of the 14th National Congress of the Central Committee of the Communist Party of China” that “accelerating the development of a new generation of information technology, biotechnology, high-end equipment, new energy, new materials, new energy vehicles , Green environmental protection, aerospace and marine equipment industries. Promote the deep integration of the Internet, big data, artificial intelligence and other industries…”

In addition to specifying the direction of development, the government has also taken a variety of measures to promote industry development and market prosperity, such as subsidies, purchase tax reductions, and permission for wholly foreign-owned Tesla to set up factories in China. It can be said that under the guidance of the national will, the replacement of fuel vehicles by new energy vehicles has become an irreversible development trend.

On the macro level, the Chinese economy is still in the growth stage. To become the world’s first active economy during the 2020 pandemic. A stronger economy has also contributed to the increase in per capita disposable income from 18,000 in 2013 to 32,000 in 2020, a compound growth rate of 8% in the past seven years. At the same time, people’s consumption levels are constantly improving. Per capita consumption expenditure on transportation and communication has increased from 1,600 yuan in 2013 to 2,800 yuan in 2019, with a compound annual growth rate of 10%. Judging from the current growth trend, in the absence of extreme factors, the national per capita disposable income will maintain a steady growth in the next five to ten years, which provides a guarantee for the development of the new energy automobile industry.

According to the “Energy-saving and New Energy Vehicle Technology Roadmap 2.0”, sales of new energy vehicles will account for 20% by 2025, 40% by 2030, and 50% by 2035. Assuming 25 million car sales in 2025, 2030 and 2035, sales of new energy vehicles will reach 5 million, 10 million, and 12.5 million, respectively, with a five-year compound growth rate of 30%, 15%, and 5%, respectively . Calculated on the basis of 1.37 million vehicles in 2020, it is expected to increase 3.6 times by 2025.