J.P. Morgan China/HK FTM 3 Jul 26 China Battery & Materials; Hong Kong Commercial Property; Greater China Data Watch; Hong Kong Economics; Shandong Sinocera - A

Research evidence excerpt

J.P. Morgan China/HK FTM 3 Jul 26 China Battery & Materials; Hong Kong Commercial Property; Greater China Data Watch; Hong Kong Economics; Shandong Sinocera - A

Asia Pacific Equity Research

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China/HK First to Market 03 July 2026

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China Battery & Materials (Rebecca Wen / Avery Chan)

CATL keeps charging ahead of peers; July battery production remains solid

CATL-A and China’s battery supply chain stocks have pulled back about 15–35% from early-May peaks (vs.

CSI300 -1%) due to sector rotation and a lack of fresh catalysts, with sentiment further pressured by rising

geopolitical tensions (e.g., EU–China trade friction and the U.S.’s potential ban on Chinese ESS inverters

reported on 1-July, note) and downward revisions to CATL/BYD’s June production volumes (per ZE

Consulting on 27 June and ICCSino shortly after). The correction has also coincided with seasonally slower

battery production in June–July, weaker-than-expected domestic passenger EV demand so far in 2Q, and

more cautious procurement amid softening raw material prices; however, we view it mainly as near-term

seasonality and inventory adjustment rather than a medium-term growth deterioration. ZE Consulting’s

latest forecast indicates the top six battery producers are planning a 6% m/m and 64% y/y increase in July,

moderating from stronger months earlier this year but still better than the typical seasonal pattern seen in

July 2025.