CATL 3750

[winston]

vested

<Research> M Stanley: Concerns Over CATL (03750.HK) Appear Exaggerated; Share Price Has Yet to Reflect Fundamental Improvement

The broker believes recent positive fundamentals have yet to be reflected in the share price, including accelerating growth in energy storage deployment, strong tender activity and implementation of capacity pricing policies, faster electrification of trucks amid elevated diesel prices, and China's anti-involution push driving industry consolidation.

The broker added that the company has around 30% return on equity and around 50% return on invested capital, while the current valuation appears to imply a sharp earnings decline next year, contrasting with management guidance for earnings growth of over 25% by 2027.

Drivers such as faster EV penetration in Europe, electrification of commercial fleets and rising global energy storage demand are also improving rather than deteriorating.

If manufacturers were required to absorb all costs themselves, more than 30% of industry capacity could fall into negative cash profitability. Against a backdrop of tightening supply and capacity reduction, industry conditions should support cost pass-through.

Source: AAstocks.com

https://www.aastocks.com/en/stocks/news ... -news/AAFN

[winston]

not vested

<Research> CLSA Says CATL (03750.HK) Most Discussed by Investors, Maintains "High Conviction Outperform" Rating

CLSA published a research report stating that at the annual investor forum held last week, the stock most discussed by investors was CATL (03750.HK) .

Some investors were optimistic about its long-term development roadmap, believing the company can overcome short-term challenges and maintain its dominant position, and were willing to endure short-term volatility.

Bearish investors, however, believed the company still faces greater downside risks in earnings and share price.

CLSA maintained its "High Conviction Outperform" rating on CATL (03750.HK) with a TP of HKD770.

The broker noted that investors believe the decline in CATL (03750.HK) 's gross margin in 1H26 should be temporary, expecting margins to stabilize in 2H26 as lithium prices fall, while the commercialization of sodium-ion batteries may help ease part of the raw material cost pressure starting from 2027.

On the bearish side, some investors were pessimistic about energy storage demand in 2027, with the most bearish forecast suggesting China's energy storage demand may decline YoY next year.

They also viewed the recent diversification of suppliers by electric vehicle manufacturers to reduce reliance on CATL (03750.HK) as a signal of potential market share loss.

Amid intensifying competition, the company may be forced to cut prices to defend market share, which could lead to a structural decline in gross margin.

CLSA currently remains optimistic and believes the current setbacks are only temporary.

Source: AASTOCKS Financial News

https://www.aastocks.com/en/stocks/news ... -news/AAFN