Ningbo Ronbay New Energy Technology: Risk Reward Update

Research evidence excerpt

Ningbo Ronbay New Energy Technology: Risk Reward Update

UpdateM

RiskRisk RewardReward– Ningbo- RonbayNingboNew RonbayEnergy TechnologyNew(688005.SS)Energy Technology

(688005.SS)Profitability outlook remains challenging

PRICE TARGET Rmb14.10 UNDERWEIGHT THESIS

We value the stock at 1.2x 2026e P/B, a historical low level to reflect the challenging ▪Ronbay's utilization is relatively low

earnings outlook for the company. compared with other battery material

players, implying limited bargaining power Rmb28.01

for price hikes.

Consensus Price Target Distribution Rmb13.00 Rmb36.50 may have lost market share to MS PT ▪Ronbay

competitors, as the company recorded a 15%Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

YoY decline in sales volume in 2025, despite

sales volume coming in better than our

expectations. Industry volume still saw a

RISK REWARD CHART small increase.

▪The company's earnings are vulnerable to

changes in metal prices, and it's difficult for

CNY the company to pass these through to

customers.

40 Rmb35.00Rmb35.00(-0.88%)Rmb35.00(-0.88%)(-0.88%)

Rmb35.31Rmb35.31Rmb35.31 Consensus Rating Distribution

30 60% Overweight

0% Equal-weight

40% Underweight

MS Rating

Rmb14.10Rmb14.10(-60.07%)Rmb14.10(-60.07%)(-60.07%) Source: Refinitiv, Morgan Stanley Research

Rmb10.50Rmb10.50(-70.26%)Rmb10.50(-70.26%)(-70.26%)

Risk Reward Themes

0 Electric Vehicles: Positive

MAY '25 NOV '25 MAY '26 MAY '27

Pricing Power: Negative

Key: Historical Stock Performance Current Stock Price Price Target View descriptions of Risk Rewards Themes here

Source: Refinitiv, Morgan Stanley Research

BULL CASE Rmb35.00 BASE CASE Rmb14.10 BEAR CASE Rmb10.50

>Rmb5k/ton unit net profit and 3x 2026e Loss making and 1.2x 2026e P/B Extended loss and 0.9x 2026e P/B

P/B