Contemporary
Amperex
Technology
,
better
known
as
CATL,
is
an
understated
giant
in
the
electric
vehicle
world.
It’s
the
biggest
stock
by
market
capitalization
in
the
index
of
largest
stocks
traded
on
the
Shenzhen
exchange
—
bigger
than
even
BYD’s
local
listing.
CATL
is
a
major
supplier
of
electric
car
batteries
for
all
the
big
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
so
far.
But
stock
analysts
think
CATL
shares
still
have
a
long
way
to
run
from
its
close
of
189.03
yuan
($26.25)
on
Friday.
That’s
despite
an
ongoing
European
Union
probe
into
the
role
of
subsidies
in
Chinese
electric
vehicle
production.
“We
maintain
our
Buy
rating
for
CATL
on
its
first-mover
advantage
in
localized
production
in
EU,”
Nomura
analysts
said
in
a
Nov.
6
report.
They
had
a
neutral
rating
on
their
two
other
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
offsets
geopolitical
risks.
“We
believe
that
the
technology
leadership
and
strong
production
commitment
(especially
in
the
EU)
could
help
better
navigate
trade/tariff/FX
uncertainty
(e.g.
recent
EU
antisubsidy
investigation)
and
further
grow
its
overseas
market
share,”
HSBC
analysts
said
in
an
Oct.
24
report
about
CATL.
Even
after
trimming
their
price
target
on
the
buy-rated
stock,
the
analysts
have
a
price
target
of
266
yuan
—
just
over
40%
upside
from
Friday’s
close.
“As
per
the
company
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
Hungary
plant
with
Phase
I
planned
annual
capacity
of
34GWh
(total
100GWh)
is
also
under
construction,”
the
HSBC
report
said.
CATL
disappointed
analysts
slightly
with
its
third
quarter
earnings
out
on
Oct.
19.
Revenue
for
the
quarter
was
105.43
billion
yuan,
below
the
112.31
billion
yuan
predicted
by
FactSet,
while
net
income
also
missed
at
10.43
billion
yuan
versus
12.16
billion
yuan
expected.
“CATL
continues
to
win
share
overseas
with
key
European
OEMs
including
VW,
BMW,
Mercedes-Benz
etc,
as
they
have
won
contracts
for
major
EV
launches
in
2026,
and
we
expect
CATL’s
overseas
market
share
will
continue
to
rise,”
Jefferies
analysts
said
in
an
Oct.
19
report.
“Despite
market
oversupply
and
competition,
CATL
demonstrates
ability
to
maintain
decent
profitability
through
better
technology
and
cost
advantage,”
the
analysts
said.
They
have
a
price
target
of
284
yuan,
or
50%
upside
from
Friday’s
close.
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
already
achieved
a
breakthrough
in
sodium-ion
battery
chemistry,
and
we
expect
to
see
the
mass
adoption
of
such
batteries
very
soon,”
Counterpoint
Research’s
Peter
Richardson
said
in
a
note
Wednesday.
“A
model
of Chery’s
iCar
brand
is
expected
to
be
equipped
with
CATL’s
sodium-ion
battery
and
go
on
sale
in
early
2024,”
he
said.
The
batteries
are
the
most
expensive
component
of
electric
cars.
Cutting
the
cost
of
the
battery,
improving
its
charging
speed
and
extending
its
driving
range
all
help
make
electric
cars
more
attractive
to
consumers.
Li
Auto,
which
reported
record
deliveries
in
October
that
beat
out
Tesla
,
is
launching
its
first
purely
battery-powered
vehicle
in
December
—
with
a
new
CATL
battery
called
Qilin.
Citing
in
part
that
fast-charging
Qilin
battery
and
similar
new
products
for
Chinese
electric
car
brands
Avatr
and
Chery,
UBS
analysts
on
Oct.
19
printed
a
price
target
of
400
yuan
a
share.
That’s
111%,
or
more
than
double,
where
CATL
closed
Friday.
UBS
analysts
also
noted
CATL
forecast
an
improvement
in
deliveries
in
the
fourth
quarter
from
the
third,
while
pointing
out
its
lithium
mine
in
Jiangxi
has
already
been
put
into
production.
—
CNBC’s
Michael
Bloom
contributed
to
this
report.
