[Huafu Electric New Energy] Continue to Be Bullish on Lithium Batteries!

English summary

1) Lithium carbonate futures peaked at 137k this round, have stabilized, with the center moving up; latest quote is 147k. We believe the rebound simply reflects two points: (1) good short-term production schedules, significant inventory destocking, and tight supply; (2) improved visibility into solid lithium battery demand next year. 2) CATL announced a record buyback and cancellation plan of RMB 20-40 billion, backing its confidence in 20-30% CAGR industry demand over the next five years and its own investment value. Its rebound will strongly boost sector confidence and help valuation recovery. (1) Leading battery makers like CATL and EVE trade at ~13-14x next year; leading material firms Enjie, Putailai, Hunan Yuneng, and Tinci are at 10-13x under neutral volume-price assumptions. (2) After the stock crash and pessimistic demand views on domestic storage and NEVs, it's hard to find optimists on next year's lithium demand, let alone 20% CAGR over five years; low expectations at the bottom are not bad.