瑞浦兰钧 (0666.HK): REPT BATTERO Energy (666 HK): Buy: Earnings recovery on track

REPT's earnings recovery is on track, led by ESS growth and margin expansion. 1H26 net profit reached RMB704m (largely in line with market expectation), vs a RMB65m loss in 1H25, with ESS shipments up c44% y-o-y and EV battery shipments up c15%. GPM expanded to 13.3%, from 8.7% in 1H25 and 12.7% in 2H25, supported by recovering cell ASPs, higher lithium costs, and operating leverage from stronger volumes and utilisation. However, the stock has fallen 32% y-t-d (vs HSCI down 7% over the same period), as the market continues to discount softer battery demand in 2027-28 and uncertainty over cost pass-through. Into 2H26, seasonal EV recovery and improving visibility on ESS demand could provide near-term catalysts. We forecast 2026-28 net profit CAGR of 29%, driven by continued ESS growth, relatively soft EV demand, and modest improvement in unit profitability. With ESS accounting for c62% of revenue (for 1H26), REPT remains well positioned to benefit from continued global ESS demand growth