Morgan Stanley has released a research report indicating that it has raised its EBITDA forecasts for CATL (03750) for 2026 to 2028 by 6%, 8%, and 9%, respectively, driven by increased penetration in the high-end market. Profit forecasts for the same period were also raised by 6.5%, 9%, and 10%, respectively. The firm increased its H-share target price from HK$655 to HK$695, while maintaining an "Equal-weight" rating. Concurrently, Morgan Stanley raised its A-share target price for CATL (300750.SZ) from 530 yuan to 560 yuan, reiterating an "Overweight" rating. The next-generation condensed-state battery unveiled by CATL at the Beijing Auto Show has set a new benchmark for luxury electric vehicle models, accelerating the electrification process in the premium vehicle segment. The report suggests that high-end batteries command higher average selling prices, and sales of luxury electric vehicles are typically less sensitive to price fluctuations. As the proportion of advanced solutions like the Kirin Battery and condensed-state batteries increases, the company's overall profit margins are expected to benefit, even if pricing remains competitive in the mass market. Morgan Stanley anticipates that the condensed-state battery will further solidify CATL's dominant position in the high-end electric vehicle battery market, including luxury and ultra-luxury brands, helping the company extend its lead in long-range, high-performance applications with the highest technical barriers. The firm projects that CATL's annual deployment of high-end electric vehicle batteries could reach 50 to 80 gigawatt-hours from 2026 to 2028, with long-term potential exceeding 100 gigawatt-hours.
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