CHINA/HK FIRST TO MARKET

Research evidence excerpt

CHINA/HK FIRST TO MARKET

Asia Pacific Equity Research

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China/HK First to Market 03 July 2026

Top Stories

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. CATL’s production momentum continues to stand out, with battery output up ~80% y/y in 2Q26

and expected to grow >70% y/y in July, outperforming peers at ~40–50% growth. CATL remains our top pick