According to a research report released by CITIC Securities, the profits of four overseas battery companies—LG Energy Solution (LGES), Samsung SDI, SK Innovation (SKI), and Panasonic—experienced a notable quarter-on-quarter decline in the fourth quarter of 2025. Notably, except for Panasonic, the latter three companies incurred losses. Despite the revenue growth driven by the burgeoning energy storage business, the cancellation of electric vehicle subsidies in North America resulted in a downturn in power battery sales. Additionally, the high initial operating costs associated with energy storage production lines further compressed profit margins. Looking ahead to 2026, Japanese and Korean battery companies are projected to face a continued erosion of their market share in the power battery sector when competing against their Chinese counterparts. However, further observation is warranted to assess subsequent product validation processes, capacity expansion initiatives, and order fulfillment capabilities. Chinese battery companies are poised to maintain their leading position in the global power and energy storage battery markets. CITIC Securities strongly recommends leading domestic battery firms that are expanding their overseas market presence, demonstrating robust profitability, and enjoying significant valuation advantages.