Contemporary Amperex Technology, better known as CATL, is a unique giant in the world of electric vehicles. It is the largest stock by market capitalization in the index of the largest stocks traded on the Shenzhen exchange – bigger than even the local BYD listing. CATL is a leading supplier of electric car batteries for all major industry players from BMW to Tesla. BYD makes its own batteries. Chinese stocks have been depressed all year, and CATL is no exception with a decline of nearly 13% for the year to date. But stock analysts believe CATL shares still have a long way to go from its close of 189.03 yuan ($26.25) on Friday. That is despite an ongoing investigation by the European Union into the role of subsidies in the production of Chinese electric vehicles. “We maintain our Buy rating for CATL on the benefit of its first shift in local production in the EU,” Nomura analysts said in a report on November 6. They had a neutral rating on its other two battery stock picks. Nomura has a price target of 315 yuan – for an upside of nearly 67% from Friday’s close. For many analysts, the fact that CATL is already manufacturing in Europe offsetting geopolitical risks. “We believe their technology leadership and strong product commitment (particularly in the EU) could help navigate trade/tariff/FX uncertainty (eg anti-subsidy scrutiny the EU recently) and grow more of its market share abroad,” HSBC analysts said in October 2017. 24 reports about CATL. Even after cutting their price target on the stock with a buy rating, the analysts have a price target of 266 yuan – just over 40% upside from Friday’s close. “According to the company’s earnings call, its first European plant in Thuringia (planned annual capacity at 14GWh) has been ramping up smoothly since starting production in January 2023, and its Hungarian plant with planned annual Phase I capacity of 34GWh (total 100GWh). is also being raised,” the HSBC report said. Revenue for the quarter was 105.43 billion yuan, lower than the 112.31 billion yuan expected by FactSet, while net income also missed the 10.43 billion yuan compared to an expected 12.16 billion yuan. “CATL continues to win overseas share with major European OEMs including VW, BMW, Mercedes-Benz etc., as they have signed contracts to earnings for major EV launches in 2026, and we expect CATL’s share of the overseas market to continue to rise,” Jefferies analysts said in an Oct. 19 report. “Despite oversupply in the market and competition, CATL shows an ability to maintain reasonable profitability through better technology and cost advantage,” the analysts said. They have a price target of 284 yuan, or 50% upside as of late Friday. More products coming to market The company already has just over a third of the global EV battery market, with more products on the way, according to Counterpoint Research. “CATL has made progress have already made significant progress in sodium-ion battery chemistry, and we expect to see the adoption of such batteries very quickly,” Counterpoint Research’s Peter Richardson said in a note on Wednesday. “A model of Chery’s iCar brand is expected to be equipped with a CATL sodium-ion battery and go on sale in early 2024,” he said. The batteries are the most expensive part of electric cars. charging the battery, improving its charging speed and extending its driving range all help to make electric cars more attractive to consumers. Li Auto, which reported delivering more peak in October that beat Tesla , launching the first battery-only vehicle in December – with a new CATL battery called Qilin. Noting in part that the Qilin battery that was rapid spending and similar new products for Chinese electric car brands Avatr and Chery, UBS analysts on October 19 printed a price target of 400 yuan per share. That’s 111%, or more than double, where it closed CATL on Friday UBS analysts also noted that CATL forecast an improvement in fourth-quarter deliveries from the third quarter, pointing out that its lithium mine in Jiangxi has already been put into production . — CNBC’s Michael Bloom contributed to this report.
