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Investing.com - UBS has upgraded Yunnan Energy New Material Co Ltd (SZ:002812) from Neutral to Buy, while more than doubling its price target to RMB75.00 from RMB33.00.
The upgrade comes as UBS turns more positive on the separator market, citing recovering downstream demand fueled by better-than-expected energy storage system (ESS) demand. The firm notes that compared to other battery supply chain subsectors, separator manufacturers face limited capacity additions and less likelihood of further capacity announcements in 2026-27.
Based on higher assumed shipments and improved margins, UBS has raised its 2026-27 earnings estimates for Yunnan Energy by 95-149%, positioning its forecast approximately 40% above current market consensus.
Despite a recent share price rally, UBS believes the market has not fully priced in potential earnings upside for the company, commonly known as Enjie in the industry.
The firm identified several potential catalysts that could drive further stock appreciation, including additional separator price increases, better-than-expected production schedule data, and earnings beats in upcoming quarterly reports.
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