Haitong International has issued a research report reiterating its "Outperform" rating on Contemporary Amperex Technology Co.,Ltd. (CATL) (03750), with a target price of HK$773. The report cites the company's stronger-than-expected Q1 2026 results and the establishment of its new resource group as key factors reinforcing its positive outlook. The establishment of the Time Resource Group marks a new phase in vertical integration, further securing the supply chain and enhancing cost advantages.
Concurrently, explosive growth in AI computing power and energy storage demand is seen lifting the company's long-term growth potential. Consequently, Haitong International has raised its target price-to-earnings (P/E) ratio for the 2026 Hong Kong stock to 32 times, up from a previous 28 times. The firm forecasts CATL's net profit for 2026-2028 to be RMB 95.9 billion, RMB 117.9 billion, and RMB 144.0 billion, respectively. This corresponds to a target total market capitalization of RMB 2.65 trillion. Based on the H-share capital ratio and a current RMB/HKD exchange rate of 1.15, the target price for the Hong Kong shares is calculated at HK$773.
The main points from Haitong International's report are as follows:
**Results Exceed Expectations Again, Demonstrating Profit Resilience** In Q1 2026, CATL reported revenue of RMB 129.1 billion, a year-on-year increase of 52%. Net profit attributable to shareholders reached RMB 20.7 billion, up 49% year-on-year, once again surpassing market expectations for quarterly profitability. Combined confirmed sales of power and energy storage batteries exceeded 200 GWh, growing over 67% year-on-year. Energy storage battery shipments were approximately 50 GWh, accounting for 25% of the total, indicating significant product structure optimization. The net profit per watt-hour in Q1 was RMB 0.103, slightly lower than the full-year 2025 average of RMB 0.109 but essentially flat compared to Q4 2025. Despite rising prices for raw materials like lithium and copper since Q4 2025, the company's strong bargaining power ensured smooth cost pass-through, demonstrating resilient profitability across cycles.
**Market Share Expansion Accelerates, Capacity Bottleneck Nearing Resolution** In 2025, the company's capacity utilization rate reached 97%, highlighting a production bottleneck. With accelerated capacity expansion in 2026, industry concentration is expected to increase further. The operational rate is projected to remain near 90% in the first half of 2026. Strong demand and enhanced competitiveness were evidenced by a robust performance in the traditionally slower Q1 period. According to SNE data, CATL's global market share for power batteries exceeded 40% in January-February 2026 and continues to rise. Looking ahead, with the batch delivery of large-capacity 587 Ah cells, 6.25 MWh energy storage systems, and the upcoming launch of a 9 MWh ultra-large system solution, market share is anticipated to become more concentrated following the release of new capacity.
**Establishment of Time Resource Group Deepens Integration and Strengthens Supply Chain** The company announced the establishment of the Time Resource Group with a registered capital of RMB 30 billion. This specialized platform will integrate the company's existing upstream core resource investments in lithium, nickel, phosphorus, and others. This move signifies a new stage in the company's vertical integration strategy, aiming to enhance resource control and supply chain security through specialized operations, thereby further solidifying its cost advantage. Against a backdrop of increasing raw material price volatility, strategic control over core resources is expected to effectively mitigate cost fluctuations and strengthen profit stability and risk resilience.
**AI-Computing-Power Synergy and Clear Long-Term Growth Space** Driven by the triple factors of grid stability, energy security, and the explosion in AI computing power demand, the company forecasts global lithium battery demand will exceed 4 TWh by 2030, nearly doubling from approximately 2.2 TWh in 2025, representing a CAGR of 20%-30%. Leveraging its advantages in technological iteration, economies of scale, and global production capacity layout, CATL is well-positioned to achieve simultaneous growth in shipment volume, market share expansion, and global profit growth, continually enhancing its leading attributes.
Risk factors include fluctuations in raw material prices, changes in overseas policies, and intensifying industry competition.
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