2025-06-11-花旗集团-宁波容百新能源科技股份有限公司（688005）_宁波容百新能源科技（688005.SS）_模型更新；目标价调整为23.2元_股_维持中性评级_13页_476kb

Summary of Financial Report on Ningbo Ronbay New Energy Technology (688005.SS)

ReportOverview

Citi Research updated its financial model for Ningbo Ronbay New Energy Technology based on FY24 and 1Q25 results, revising the target price to Rmb23.20 per share from Rmb26.64 and maintaining a Neutral investment rating. The review incorporates latest management guidance and reflects adjustments due to lower-than-expected performance.

Key Changes in Earnings Forecast:

• 2025E earnings revised to Rmb370mn, a 11% cut from previous estimates.
• 2026E earnings revised to Rmb599mn, reflecting a 14% reduction.
• 2027E earnings forecast introduced at Rmb844mn.
  Reasons: Primarily due to lower cathode sales volumes and impairment losses from reduced lithium prices.

Valuation Adjustments:

• Target price set at Rmb23.20/sh based on a forward EV/EBITDA multiple of 14.6x for 2025E.
• Valuation uses the historical average minus 0.75x standard deviation to avoid long-term uncertainties.
• Target implies 45.2x 2025E P/E and 27.9x 2026E P/E.

Company Context:
Ningbo Ronbay New Energy Technology, established in 2014, is a leading Chinese cathode material manufacturer. Notably, it's the first to achieve mass production of NCM811 cathodes and is investing in its Korean NCM cathode factory to drive profitability improvements. Current stock price is Rmb20.890.

Investment Recommendation:
Citi maintains Neutral, citing fair current valuations despite expected profitability gains from the Korean factory. Weak NCM cathode demand growth remains a key concern.

Risks and Catalysts:

• Downside Risks: Lower NCM cathode shipments or worse unit gross margins due to increased competition or declining lithium prices.
• Upside Risks: Higher-than-expected shipments, better-than-expected gross profit per unit, or cost reductions.
• Quantitative risk rating assigns High Risk, but Citi believes the cycle may be at its trough with competitive improvements expected in 2025E.