Lead Intelligent's 2025 results met expectations, with energy storage expansion and all-solid-state battery potential supporting mid- to long-term growth

Overview

This report is Goldman Sachs' earnings review and first coverage of Lead Intelligent’s H-shares. It views the company as a global leading battery equipment manufacturer, with lithium battery equipment contributing about 70% of revenue over the past five years, and expects battery equipment revenue share to rise to around 85% by 2030E as expansion in energy storage systems, higher concentration among Tier 1 battery customers, and all-solid-state battery equipment potential unfold.

Core views

The core view is that 2025 results were broadly in line with expectations, with orders, cash flow, and margins having recovered from the 2023-2024 trough in the battery industry. Energy storage systems are expected to be the main driver of the next wave of battery equipment order growth; top customers including CATL and BYD are expected to return to 70%-80% contribution, while all-solid-state battery is currently small but has meaningful long-term scaling potential. On ratings, Goldman Sachs believes A-shares valuation is broadly fair and therefore keeps Neutral; H-shares trade at about a 20% discount, giving higher implied returns, so it assigns Buy.

Analysis framework

The report analyzes 2025 actual performance, 2026 order trends, customer structure, energy storage and power battery expansion pace, all-solid-state battery technology roadmap, and relative A/H-share valuation discount. Profit forecasts are anchored on 2026E-30E revenue, margin and net profit compound growth, with valuation based on a 2027E P/E framework and a 20% relative discount applied to H-shares versus A-shares.

Methodology notes

• Valuation methods2027E P/E

  A-share target price uses a 30x 2027E P/E, while H-share target price uses 24x 2027E P/E.

  Goldman Sachs shifted the valuation basis from 2026E to 2027E, arguing that revenue accelerated by energy storage demand is more likely to be realized in 2H26E-2027E; the 24x multiple for H-shares is derived by applying a 20% discount to the A-share 30x valuation.

• Relative valuationH-share discount reversion analysis

  A/H-share discount is explained by market capitalization, H-share dividend yield, and A-share foreign ownership.

  The report applies a 12-month average China industrial stock H-share discount regression and finds market capitalization and A-share foreign ownership to be strong explanatory variables, thus using a 20% discount for Lead Intelligent H-shares.

• Industry cycleOrders lead revenue recognition

  Domestic and overseas customer orders have roughly 9-12 and 12-24 month lags, respectively, from order placement to revenue recognition.

  The report believes battery capacity recovery beginning at end-2024 will gradually flow through to 2026-2027E results, which is a key rationale for extending valuation to 2027E.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 300450.SZ

  Lead Intelligent A-shares

  Strengths

  Leading position in battery equipment, around 25% global intelligent lithium battery equipment share, expected improvement in contributions from top customers CATL and BYD, and order increments from energy storage and all-solid-state batteries.

  Weaknesses

  Profitability remains highly dependent on battery equipment, A-share valuation is near historical average, H-share issuance causes about 7% dilution, and gross margin in 2025 is still affected by low-margin project recognition during the trough period.

  Comparison

  A-shares apply 30x 2027E P/E with target price of Rmb55.7; Goldman Sachs keeps Neutral, viewing valuation as relatively fair.

  Risks

  EV demand may weaken, energy storage expansion may fall short, new-business expansion may lag, and commercialization pace for all-solid-state batteries is uncertain.

• 0470.HK

  Lead Intelligent H-shares

  Strengths

  Shares the same fundamental improvement thesis as A-shares, with current roughly 20% H-share discount creating higher implied upside.

  Weaknesses

  H-share valuation still has to absorb the relative discount versus A-shares, and liquidity and foreign ownership factors may affect discount convergence.

  Comparison

  H-shares use 24x 2027E P/E, i.e., a 20% discount to A-share 30x valuation; target price HK$50.8, Goldman Sachs rating is Buy.

  Risks

  If the H-share discount widens or energy storage orders and margin recovery fall short of expectations, the stated upside may not be realized.

Key data

• 2025 revenue/operating profit/net profitRmb14,443mn / Rmb1,292mn / Rmb1,564mnUp 22%, 194%, and 447% year-on-year, respectively, vs Goldman Sachs forecasts of -0%, -24%, and -3%.
• 2025 new ordersRmb24bn, up 20% y/yBattery equipment contributed about 75%.
• 1Q26 order trendabout +60% year-on-yearEquivalent to about Rmb9-10bn in orders, indicating 2026 order growth may be higher than the company's prior >30% outlook.
• 2026E-30E revenue/net profit CAGR24% / 29%Mainly driven by expansion in energy storage systems, improved customer mix, and margin recovery.
• Energy storage system order contributionabout 40% in 2026E-30EHigher than the pre-2025 level of below 25%; company guidance indicates energy storage/power battery contributions of around 50%/50% in 2026.
• All-solid-state battery order baseabout Rmb1bn in 2025The company expects related orders to potentially double in 2026, above industry year-on-year growth of 60%-80%.
• A-share target price and upsideRmb55.7; 17.1%Based on 30x 2027E P/E, rating remains Neutral.
• H-share target price and upsideHK$50.8; 19.8%Based on 24x 2027E P/E, first-time coverage initiated with Buy.

Impact & implications

If energy storage system capacity expansion continues to materialize, Lead Intelligent's order profile and revenue visibility are expected to improve, and margins may recover as industry utilization and ASPs normalize. The investment implications differ for A- and H-shares: while A-shares have roughly 17% upside potential, Goldman Sachs believes relative sector coverage returns and historical valuation are not particularly compelling; H-shares are more attractive due to trading discount and higher implied returns.

Risks

• More severe slowdown in EV development in China and globally, hurting power battery and battery equipment demand.
• Energy storage system capacity expansion lags expectations, weakening the assumption of about 40% order contribution in 2026E-30E.
• Faster-than-expected weakness in non-battery businesses such as photovoltaics and consumer electronics, resulting in excessive reliance on battery equipment.
• All-solid-state battery technical maturity and commercialization timeline remain uncertain, with uncertainty from pilot orders to scale-up.
• A weaker industry cycle could suppress ASPs and capacity utilization, impairing collections and margin recovery.

What to watch

• Whether 2026 new orders continue above the company’s >30% growth guidance, especially whether the roughly +60% year-on-year 1Q26 order trend persists.
• Whether the share of energy storage system orders moves toward a 50%/50% split between energy storage and power batteries.
• Whether order contribution from Tier 1 customers such as CATL and BYD rebounds to 70%-80%.
• Progress on pilot all-solid-state battery orders, yields, and cost-efficiency improvements, and whether a clear commercialization schedule emerges.
• Whether gross margin, operating margin, net margin, and operating cash flow continue the recovery trend seen after 2025.
• Whether the roughly 20% discount of H-shares versus A-shares holds or converges.