Assessment of Zhongke Electric's Business Dependence on CATL and Customer Concentration Risks

According to disclosures by Zhongke Electric on investor interaction platforms and public information [1][2]:

Indicator	Data	Assessment
Revenue share of top five customers	79%	Relatively high level
Revenue share of CATL (single customer)	37.9%	Largest customer
Market share of global top 5 battery enterprises	Approximately 80%	Basically matches the company’s customer structure

Zhongke Electric’s lithium battery anode business covers well-known domestic and foreign lithium battery enterprises, including CATL, BYD, CALB, EVE Energy, REPT BATTEROY, SVOLT Energy, ATL, LGES, SK On, Samsung SDI, etc. [3]. This customer structure aligns with the highly concentrated characteristics of the global power battery industry.

In February 2022, Zhongke Xingcheng Holdings and CATL increased capital to Zhongke Xingcheng in Gui’an New Area. CATL holds a 35% stake, while Zhongke Xingcheng Holdings holds a 65% stake [4]. This equity binding reflects the depth of strategic cooperation between the two parties.

• 2019
  : Zhongke Electric began mass supply to CATL [4]
• Continuous Cooperation
  : The two parties maintain a good long-term cooperative relationship
• Capacity Binding
  : CATL’s capacity expansion plan corresponds to approximately 670,000 tons of anode demand from Zhongke Electric (projected for 2025) [4]

Lithium battery material enterprises generally adopt a key customer strategy. According to industry analysis reports, Putailai’s revenue share from CATL is approximately 39.05%, and Jiayuan Technology has established a strategic cooperative relationship with CATL [5]. This binding model ensures orders while effectively converting production capacity into sales volume.

Risk Type	Risk Level	Explanation
Single Customer Dependence Risk	Medium	CATL accounts for 37.9% of revenue; while it is not a single customer dependence, the concentration is relatively high
Downstream Demand Fluctuation Risk	Medium	Cyclical fluctuations in the battery industry may affect order demand
Bargaining Power Risk	Medium-High	Against giants like CATL, material suppliers have relatively limited bargaining power
Replacement Risk	Low	Lithium battery materials are highly customized, making it difficult to be replaced after entering the customer’s supply chain

Zhongke Electric stated [1][2]:

• The company has high-quality customer resources with a diversified customer structure
• There is no significant dependence on a single customer
• The revenue share of the top five customers is basically consistent with the market share of the global top five lithium battery enterprises
• It will further optimize the customer structure and increase market share in the future

1. Industry Concentration Matching
   : The company’s customer structure is highly consistent with the downstream industry pattern, which aligns with the characteristics of the industrial chain
2. Diversified Customer Coverage
   : Customers include domestic and foreign first- and second-tier battery manufacturers, reducing single customer dependence
3. Joint Venture Binding
   : Enhances cooperation stability through equity cooperation
4. Shipment Growth
   : Anode material shipments reached 157,000 tons in H1 2025, representing a year-on-year increase of 70.5% [3]

• The trend of the power battery industry concentrating on leading players benefits material enterprises that are bound to key customers
• The customized nature of lithium battery materials enhances customer stickiness
• The company continues to expand overseas markets and diversified customer resources

• Changes in procurement policies of major customers such as CATL
• Impact of raw material price fluctuations on gross profit margin
• Absorption risk after capacity expansion
• Overall demand fluctuations in the downstream lithium battery industry

Dimension	Score	Explanation
Customer Concentration Risk	6.5/10	Relatively high but in line with industry characteristics
Rationality of Business Dependence	7.0/10	Strategic binding is rational
Risk Controllability	6.0/10	Progress in customer structure optimization requires continuous attention

: Zhongke Electric’s business dependence on CATL is relatively high, but this dependence is a common characteristic of the lithium battery anode material industry, and the company’s deep binding with CATL (equity + business) is strategically rational. The key lies in whether the company can continue to optimize its customer structure, diversify risks, and maintain technological and cost competitiveness while binding with leading customers.

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[1] National Business Daily - Zhongke Electric: The revenue share of the company’s top five customers is basically consistent with the market share of the global top five lithium battery enterprises (https://www.nbd.com.cn/articles/2026-01-09/4214564.html)

[2] Eastmoney - Zhongke Electric: The revenue share of the company’s top five customers is basically consistent with the market share of the global top five lithium battery enterprises (https://guba.eastmoney.com/news,400077,1651007475.html)

[3] iNewEnergy - Zhongke Electric plans to invest in an integrated project with an annual output of 300,000 tons of lithium battery anode materials (https://www.inewenergy.com/newsn/gongsi/44330.html)

[4] Cinda Securities Research Report - Rising Star of Power Anode Material, Gradual Upstream Layout (https://pdf.dfcfw.com/pdf/H3_AP202208081577012038_1.pdf)

[5] China Money Network - 2025 Corporate Credit Rating Report of Shanghai Putailai New Energy Technology Co., Ltd. (https://www.chinamoney.org.cn/dqs/cm-s-notice-query/fileDownLoad.do?contentId=3166511)