J.P. Morgan China/HK FTM 20 Jul 26: Longyuan (0916); Datang Renewable (1798); Chemical Reactions; Anta Sports (2020); Xtep International; China Battery; China alt-data trackers chartpack (Series 59). Sun Jul 19 2026

Research evidence excerpt

J.P. Morgan China/HK FTM 20 Jul 26: Longyuan (0916); Datang Renewable (1798); Chemical Reactions; Anta Sports (2020); Xtep International; China Battery; China alt-data trackers chartpack (Series 59). Sun Jul 19 2026

product

offering enhancement) and core Xtep’s further mindshare gains in the running category (driven by the hero

products). We cut our ’26-28E earnings by 3-5% to factor in the sluggish retail environment. Our revised

DCF-based Dec-26 PT of HK$6.0 implies 11x 12-month forward P/E. We are positive on Xtep’s improving

earnings growth outlook, because of a higher earnings contribution from the fast-growing Saucony

business, and resilient growth of the core Xtep brand. Maintain OW.

China Battery (Rebecca Wen)

Consumption Tax: A devastating blow or a chance to reshuffle?

China announced a new battery consumption tax policy on July 17, imposing a 2% consumption tax on

lithium-ion batteries from 1stSeptember 2026 and 4% from 1st September 2027, while exempting sodium-ion

and solid-state batteries through end-2028. Key takeaways: First, the policy is broadly in line with prior

industry expectations and removes a source of uncertainty for the sector. Second, while the headline

earnings impact could become more meaningful in 2027-28 under a full-absorption scenario, leading battery

makers such as CATL should be better positioned to pass through the additional tax burden than smaller

peers. Third, we view the policy as consistent with China’s broader battery supply-side reform agenda and

expect it to further support industry consolidation and supply discipline over time. Higher tax could add to the

burden across the value chain, but CATL should see the least effect and remains our top pick in China’s

battery universe.