Guohai Securities: NFPP System Balanced Performance Enhancement - Focusing on NFPP Route Industrialization Potential

Guohai Securities released a research report stating that the NFPP system, as the current mainstream sodium-ion battery, has balanced performance across all aspects without obvious shortcomings. At the same time, startups and mainstream manufacturers are actively promoting industrialization, continuously expanding capacity, and improving material systems and processes to optimize product performance. The future growth potential of sodium-ion batteries is broad, with material manufacturers that have strong R&D and manufacturing capabilities and solid downstream customer positions, as well as battery manufacturers at the forefront of technology, all having excellent development opportunities. The industry maintains a “Buy” rating for sodium-ion batteries.

Guohai Securities’ main points are as follows:

Overview of the NFPP System: One of the Mainstream Routes for Sodium Batteries, Leading Industrialization Direction

Sodium-ion batteries have three main technological routes, with the poly-anionic system offering advantages in power and lifespan. Currently, sodium-ion batteries feature three main technical routes: poly-anionic, layered oxides, and Prussian blue systems. The NFPP system has advantages in power and lifespan, showing promising differentiated market prospects in applications such as powertrains, grid storage, power tools, and data center backup power.

The NFPP system currently exhibits balanced performance without significant shortcomings, making it a mainstream industrialization direction. NFPP materials have unique advantages in cost, safety, and cycle life. Coupled with sodium-ion batteries’ inherent advantages in wide temperature ranges and power characteristics, these balanced features are expected to make NFPP a mainstream choice through its comprehensive benefits.

Industrialization of the NFPP System: Established as a Mainstream Direction with Multiple Entities Overcoming Industry Bottlenecks

As sodium-ion industry development progresses, the NFPP system has become a mainstream direction. By 2025, the industry will continue to advance, with poly-anionic cathode materials (NFPP) establishing a dominant position due to their overall performance and cost potential, accounting for about 70%. Successful transition from small-scale trial production to 10,000-ton-level mass production lines has been achieved.

Startups and mainstream companies are progressing in parallel, with industry chain companies already establishing hundreds of tons of capacity, and plans for 10,000-ton capacity under way. Overall, current capacities of industry chain companies have reached a certain scale, laying a foundation for cost reduction in industrialization. With continuous efforts from various manufacturers, NFPP products now demonstrate relatively high performance levels. Additionally, with self-generated anode technology, the performance ceiling of sodium-ion batteries could be further elevated.

As industry know-how continues to accumulate and cost reduction drives progress, the long-term shipment of NFPP cathodes could reach millions of tons. Scaling and technological synergy are essential for NFPP materials to move from niche markets to mainstream markets. Currently, performance improvements and processing cost reductions can be achieved through various adjustments in materials and processes. According to predictions from SPIR via Sina Finance, by 2025, NFPP costs could drop to 25,000–30,000 RMB per ton, with potential further reductions below 20,000 RMB per ton in the long term. Driven by cost reduction and quality improvement, the long-term shipment of NFPP cathodes could reach millions of tons globally.

Investment Recommendations

Focus on core suppliers of the NFPP system such as Ding Sheng New Materials, Rongbai Technology, Zhenhua New Materials, Zhongke Electric, and those with growth opportunities like Yuanli Co., Ltd. and Vico Technology. Also, consider leading battery manufacturers like CATL, EVE Energy, and Penghui Energy.

Risk Tips: Industry demand underperforming expectations, customer validation progress slower than expected, competitive landscape deteriorating faster than anticipated, technological route changes exceeding expectations, development of substitute products surpassing expectations, sodium-ion technology bottlenecks exceeding expectations, and key company performance falling short of forecasts.