Damo: The Ningde Era (03750) benefited from the battery reversal, and the 95% capacity utilization rate in the first half of the year far surpassed the industry

The Zhitong Finance App learned that Morgan Stanley released a research report saying that mainland China's battery industry is entering a new stage of “anti-internal scrutiny” actions. Approvals for production capacity expansion will increasingly be linked to utilization rates, and industry leaders are expected to benefit.

The report quoted media reports that as China's battery industry deepens its “anti-internal roll” campaign against excessive competition and overcapacity, regulators have temporarily stopped approving new domestic electric vehicle battery and energy storage battery projects until the end of the year. Policy makers are no longer relying on pricing discipline alone, but are shifting to capacity discipline, linking approval of future production expansion to actual utilization rates.

The bank believes that if policies are implemented consistently, it can accelerate industry integration, improve capacity utilization, and support the electric vehicle battery and energy storage market to form a more rational competitive environment. The capacity utilization rate of the Ningde Era (03750) reached 95% in the first half of 2026, far higher than the Chinese industry average of 65%; companies with higher utilization rates have a greater chance of being approved for future battery expansion projects, while companies with lower utilization rates may face stricter new capacity restrictions.