Equity Analysis /
China

CN : Shanghai Putailai New Energy Technology - Potential leader in the global anode material market; initiate with ADD

    Kelly Zou
    Kelly Zou

    Research Analyst

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    Becky CAI
    Chi Man WONG
    CGS-CIMB
    23 January 2021
    Published byCGS-CIMB

    We initiate coverage on Shanghai Putailai New Energy Technology (Putailai) with an ADD rating and a target price (TP) of Rmb124.20. Putailai was the third-largest player in the global anode material market in 2019. We believe Putailai has the greatest potential to become the No.1 player in next 4–5 years owing to its superior scalability and vertical integration model. With the rising lithium battery market in relation to consumer electronics, NEVs and energy storage, we expect Putailai’s revenue to grow at a CAGR of 33.2% and earnings to grow at a CAGR of 45.6% in 2020–2022F. Share price catalysts are better-than-expected growth in lithium battery sales and global NEV sales volume.