Major positive news incoming? Pur-Tech surges to daily limit, plans 2 billion yuan overseas production! Battery ETF (159796) rises 1% chasing 7 consecutive gains, intraday funds accelerate inflow exceeding 42 million yuan!

On March 13, the A-share market experienced a volatile pullback, while the battery sector defied the trend and surged! By midday, the leading battery ETF with the lowest fee rate, Huatai-PineBridge (159796), rose 0.97%, hitting its seventh consecutive gain. Funds slightly flowed into the market, with Huatai-PineBridge Battery ETF (159796) attracting over 42 million yuan during trading!

The constituent stocks of Huatai-PineBridge Battery ETF (159796) showed mixed performance. Putailai hit the daily limit, Enjie Shares rose over 6%, Tianci Materials, Greenmei, Sunshine Power, and others gained over 1%, while Sanhua Intelligent Control and Lead Intelligent experienced a pullback.

【Top Ten Constituents of Huatai-PineBridge Battery ETF (159796) Index】

As of 11:30, the constituent stocks are for display purposes only and do not constitute investment advice.

Early on March 13, market interpretations of tariff news related to battery materials were seen as a major positive. Some brokerages pointed out that the most benefited could be anode materials, as these materials had previously been subject to high tariffs.

The “going global” pace of the battery industry chain accelerated. On March 12, Putailai announced plans to invest $297 million (about 2.051 billion RMB) to build a negative electrode material production base in Malaysia, which will have an annual capacity of 50,000 tons of lithium-ion battery anode materials after completion.

Since the beginning of this year, several battery companies have updated their “going global” progress, showing a multi-point blooming pattern. On January 15, CATL’s Indonesia power battery project welcomed its first cell production line, with an initial capacity of 6.9 GWh, expected to be completed and put into operation by the end of 2026, and gradually expanded to 15 GWh later.

According to CATL’s 2025 annual report, by the end of 2025, CATL’s total battery capacity was 772 GWh, with a production of 748 GWh, and a capacity utilization rate of 96.9%, setting a new record high, surpassing the previous cycle’s peak (95.0% in 2021). Additionally, based on CATL’s investor relations record on March 9, in 2025, under strong market demand, the company experienced some order spillover due to short-term capacity shortages.

Guotai Junan Securities commented that the sustained high capacity utilization rate of CATL indicates that existing production lines are near full capacity and cannot meet future order growth, necessitating expansion. With the confirmation of the battery cycle bottom and strong willingness of leading downstream battery manufacturers to expand capacity, the growth potential of battery equipment in the new cycle is promising. (Source: Guotai Junan Securities, 20260311, “CATL’s Capacity Utilization at Record High, Urgent Demand for Lithium Battery Equipment”)

【Demand Growth Drives a New Round of Expansion in the Battery Industry Chain】

Industrial Research Institute states that driven by power and energy storage markets, both domestic and overseas, China’s lithium battery demand maintains high growth, with shipments reaching 1,875 GWh in 2025, a 53% year-on-year increase. The rapid demand growth has significantly improved the supply-demand relationship in the lithium battery industry. By 2025, capacity utilization in key segments of the industry chain is expected to recover to over 70%, with some segments even experiencing supply shortages in the second half of the year. The lithium battery industry is entering a new expansion cycle, with capital expenditures in lithium batteries and lithium iron phosphate (LFP) sectors leading the growth in 2025.

In the next two years (2026-2027), China’s lithium industry chain expansion is expected as follows:

(1) Domestic lithium battery capacity is projected to increase by about 750 GWh, accounting for 30% of the existing capacity (as of the end of 2025). The enthusiasm for energy storage battery expansion is high, with emerging companies aiming to capture larger market shares through capacity increases.

(2) Cathode material expansion mainly focuses on lithium iron phosphate (LFP), with expected new capacity exceeding 3.5 million tons, about 60% of current capacity. The LFP sector’s expansion scale is large, with traditional players and cross-industry entrants such as chemical companies, battery manufacturers, and ternary material firms actively deploying; new capacity tends to bind upstream lithium and phosphorus resources to reduce costs; high-end products (high-voltage, manganese-rich LFP) account for a significant proportion of expansion.

(3) Domestic anode material capacity is expected to increase by about 1.35 million tons, 38% of current capacity. To meet the rapid growth in downstream demand, some companies prioritize expanding finished product capacity in the later stages, while mid-stage processes like graphitization, due to longer expansion cycles, are temporarily outsourced.

(4) Domestic separator capacity is expected to grow by about 10 billion square meters, about 18% of current capacity. Compared to other segments, separator expansion is smaller; some leading companies expand capacity through acquisitions.

(5) Lithium hexafluorophosphate (LiPF6), a bottleneck in electrolytes, is expected to see domestic capacity increase by 85,000 tons, about 22% of current capacity. The scale of LiPF6 expansion remains relatively small.

【What Impact Will the New Round of Expansion Have on Lithium Battery Capacity Utilization?】

Industrial Securities believes that most segments of the lithium battery industry chain will maintain high capacity utilization rates in 2026-2027, but there is a risk of declining utilization in the LFP sector. Based on companies’ expansion plans and project progress (as of February 2026), Industrial Securities estimated the supply-demand relationship across segments for the next two years. It is expected that lithium batteries, anodes, separators, and LiPF6 will still maintain high utilization rates (~80%), possibly experiencing supply shortages during peak seasons, which could drive prices higher. The LFP industry has low barriers to entry, many cross-industry players, and short expansion cycles, leading to rapid supply increases. Companies with cost advantages (e.g., integrated layouts) and technological strengths (e.g., high-voltage, manganese-rich LFP) are likely to succeed in competition. (Source: Industrial Securities, 20260313, “Supply and Demand Outlook for Lithium Battery Industry Chain in the Next Two Years”)

In addition to the dual-driven demand from power and energy storage, new technologies such as solid-state batteries and dry-process electrodes are expected to bring incremental growth. Guotai Junan Securities states that (1) Regarding solid-state batteries, according to TrendForce, major battery manufacturers are already in pilot line stages, with mass production expected to begin around 2027-2028. As a new technology, solid-state batteries will generate new demand for full-line investments and key equipment. (2) Regarding dry-process electrodes, according to GG Lithium, Elon Musk announced in February 2026 the achievement of scaled production of dry electrodes; this process eliminates traditional solvent coating and drying steps, simplifying the process, reducing costs by over 50%, and lowering energy consumption, which is expected to drive demand for upstream equipment upgrades. (Source: Guotai Junan Securities, 20260311, “CATL’s Capacity Utilization at Record High, Urgent Demand for Lithium Battery Equipment”)

【How to Position in the “Upward Cycle + Rich Catalysts” Battery Sector?】

The fundamental trend and technological catalysts of the battery sector are expected to support continued strong stock performance. However, due to the long and complex industry chain and numerous catalysts, individual stock investment is challenging. Index investment can be a better way to quickly grasp the historic opportunity of explosive growth in the sector.

ETF investment can be approached in two steps: first, select an index that closely aligns with the current explosive growth in energy storage and solid-state battery catalysts; second, choose an ETF with large scale, good liquidity, and low investment costs.

Huatai-PineBridge Battery ETF (159796) tracks an index with significantly higher energy storage content and high solid-state battery exposure! Currently, among various sub-sectors, energy storage has benefited from overseas demand surprises, with supply-demand dynamics rapidly reversing. The sub-sector’s price increase logic is strong, with energy storage content in the ETF index reaching 18%, far ahead of similar indices, allowing it to fully benefit from the energy storage boom! Additionally, as a new technology, solid-state batteries are continuously hot, with huge growth potential. The ETF’s index has a 45% solid-state battery component, fully benefiting from breakthroughs in solid-state battery technology.

Note: Energy storage includes PV equipment, grid automation, hydropower, and other energy storage devices, based on the CSI Level 4 industry classification, with solid-state battery content determined by whether constituent stocks include solid-state battery concepts, as of 20260227.

Furthermore, the top industry in the ETF index is battery chemicals, with a weight of 32%, expected to benefit from the upstream material price recovery and overall industry chain revival.

Note: Based on Shenwan Level 3 industry classification, as of 20260227.

Compared to the top ten constituent stocks, Huatai-PineBridge Battery ETF (159796) focuses on the two key sectors of energy storage and power batteries. The third-largest stock, a leading PV inverter company, accounts for 7.8%. Other similar indices do not include this stock. The ETF also covers global leading power battery companies and pioneers in solid-state batteries.

Note: Data from CSI Index and Guozheng Index official websites, as of 20260227.

Huatai-PineBridge Battery ETF (159796) precisely captures the three core technological directions: battery materials, power batteries, and energy storage batteries. It has relatively low exposure to energy metals like lithium and cobalt and vehicle manufacturing, reducing the impact of their cyclicality and consumer attributes on investment rhythm. It also proactively targets technological iteration and demand explosion as core growth drivers.

Currently, Huatai-PineBridge Battery ETF (159796) has a leading scale and the lowest fee rate. Among ETFs tracking the CSI Battery Theme Index, it is significantly larger in scale. Its management fee is only 0.15% per year, the lowest among peers, aiming to provide investors with a good investment experience. For off-market investors, linked funds are available (A: 012862; C: 012863), allowing quick access to the “second spring” opportunity in the battery sector!

Risk reminder: Funds are subject to risks; investment should be cautious. This material is for promotional purposes only and not a legal document. The short operation history of Chinese funds may not reflect all market phases. Investment involves risks; fund managers commit to managing assets with honesty and diligence but do not guarantee profits or minimum returns. Past performance does not predict future results, and performance of other funds managed by the same manager does not guarantee the fund’s future performance. Investors should carefully read the fund contract, prospectus, and product summary. The “buyer beware” principle applies. All funds mentioned are high-risk products (R4), suitable for investors with an aggressive risk profile (C4) or above, as per Huatai-PineBridge’s risk classification rules. When subscribing or redeeming ETF units, authorized brokers may charge a commission up to 0.50%, including related fees from exchanges and registries. For other funds, refer to their respective prospectuses and legal documents.