Gold prices climb, set for fourth straight month of gains on rate cut cheer
Investing.com -- Jefferies two major Chinese lithium battery stocks which it sees as well-positioned to benefit from strong industry growth in the coming year, especially amid a shift into battery energy storage systems (BESS).
The Chinese battery market remains crucial to global energy transition efforts, with companies expanding their presence in both electric vehicle (EV) and BESS segments. The latter, according to Jefferies, is expected to underpin the next leg of growth for battery makers.
Demand for energy and improved storage solutions is also expected to be supported by artificial intelligence and data centers, while EV demand is seen remaining steady.
Jefferies outlined Contemporary Amperex Technology Co Ltd (CATL) and Wuxi Lead Auto Equipment as its top picks in the sector.
Get premium breaking news, more top stock picks, and deep research tools by upgrading to InvestingPro - get 60% off today
CATL
The company maintains over 30% market share in the battery energy storage system (BESS) sector, establishing itself as the clear industry leader. CATL’s technological edge comes from its advanced 314Ah and 587Ah cells, which have helped secure a strong market presence particularly in Europe and Middle Eastern markets. However, investors should note potential risks including weaker electric vehicle sales, reduced battery installation rates, higher production costs, and the possibility of market share erosion as competition intensifies.
Wuxi Lead
As a leading global supplier of lithium battery equipment, Wuxi Lead plays a fundamental role in the battery supply chain. The company enables major power battery manufacturers to scale high-quality production while maintaining lower costs - a critical advantage in the increasingly competitive battery market. Key risks for Wuxi Lead include potential shifts in global power battery demand from both EV and energy storage system installations. Additionally, the company faces exposure to US geopolitical actions targeting Chinese lithium battery companies and possible Chinese government policies that might restrict the overseas transfer of advanced battery technologies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.