Haitong International has issued a research report maintaining an "Outperform" rating on CATL (03750). The firm notes that CATL can pass on lithium carbonate cost fluctuations through price linkage mechanisms, while new production capacity will further reduce costs, supporting stable profitability. The brokerage forecasts net profits for 2026-2028 at RMB 959 billion, RMB 1,179 billion, and RMB 1,440 billion, respectively (previously RMB 861 billion and RMB 1,035 billion), corresponding to a target total market capitalization of RMB 2.65 trillion. Based on H-share proportion and the current RMB/HKD exchange rate of 1.13, a 28x P/E ratio for 2026 (previously 30x) implies a target H-share price of HKD 656, up 6%.
Key points from Haitong International's analysis are as follows:
CATL reported its 2025 annual results on March 9, 2026. Revenue reached RMB 423.7 billion, up 17% year-on-year, while net profit attributable to shareholders rose 42% to RMB 72.2 billion, significantly exceeding market expectations. Lithium-ion battery sales volume totaled 661 GWh, a 39% increase, with power and energy storage battery sales reaching 541 GWh and 121 GWh, up 42% and 29%, respectively. Calculated profit per Wh was approximately RMB 0.11, showing a slight year-on-year improvement.
In the fourth quarter of 2025, revenue grew 37% year-on-year and 35% quarter-on-quarter to RMB 140.6 billion. Net profit surged 57% year-on-year and 25% quarter-on-quarter to RMB 23.2 billion. Gross margin reached 28.2%, up 13.2 and 2.4 percentage points year-on-year and quarter-on-quarter, respectively, reflecting solid full-year profitability.
CATL's capacity utilization rate stood at 96.9% in 2025, with temporary capacity bottlenecks becoming a key constraint on output. By the end of 2025, the company had 772 GWh of battery system capacity, with 321 GWh under construction. Haitong International expects CATL's market share to expand further as capacity constraints ease, driven by the launch of 587Ah large cells, batch deliveries of 6.25 MWh systems, and the introduction of 9 MWh ultra-large system solutions. The firm projects 2026 shipments in the range of 920–950 GWh.
Operating performance remained strong, with net cash flow from operating activities rising 37% to RMB 133.2 billion. Contract liabilities increased 77% to RMB 49.2 billion, indicating that a significant portion of 2026 capacity has been secured through customer prepayments, highlighting high order visibility. Overall gross and net profit margins reached 26.3% and 18.1%, respectively, the highest in five years, underscoring industry-leading profitability.
Overseas business revenue grew to RMB 129.6 billion, accounting for 30.6% of total revenue. Gross margin for international operations reached 31.44%, 7.44 percentage points higher than domestic operations. The German plant has achieved profitability, and the first phase of the Hungary facility completed commissioning by the end of 2025, demonstrating the successful execution of CATL's global strategy. Overseas market share jumped to 30%, while global market share in power battery usage increased by 1.2 percentage points to 39.2%, maintaining the top position for the ninth consecutive year.
Risks include fluctuations in raw material prices, changes in overseas policies, and intensifying industry competition.
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