China says Nvidia broke competition rules, extends probe; stock off lows
Investing.com - UBS initiated coverage on Hunan Yuneng New Energy Battery (SHE:301358) with a Neutral rating and a price target of RMB38.00.
The Chinese company, which is the largest LFP (lithium iron phosphate) cathode supplier globally, has outperformed competitors during the 2023-24 industry downturn, according to UBS.
Yuneng operated near full capacity in the second quarter of 2024, while the industry average utilization rate stood at only 60%, data from ICCSINO shows.
UBS notes that market share gains may be limited going forward as industry utilization has improved to 70%, with tier-2 companies catching up and gaining market share.
The recent pricing recovery in the second half of 2024 appears to be short-lived due to additional supply being added and announced, which limits further improvement in industry utilization rates, UBS explains.
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