Investment highlights
1Q20 earnings are expected to be lower than initially anticipated due to sluggish small battery sales and domestic ESS sales. However, the weak results have been already widely anticipated by the market. We revise down our 2020 earnings forecasts in light of lackluster small battery and ESS demand. Having said that, EV sales should remain modest. German automakers such as Volkswagen (OTCPK:VLKAF) have announced plans to reopen plants gradually from end-April. Accordingly, worries over battery demand should ease. The recovering growth potential of small batteries will grow increasingly important going forward.