Goldman Sachs believes the market is underestimating the structural transformation value of CATL's energy storage business — the world's largest power battery manufacturer is accelerating its shift from a single cell supplier to an AC-side integrated energy storage solution provider, a transition that will drive its energy storage unit gross profit up by approximately 1.6 times between 2026 and 2030.
According to Goldman Sachs research, as CATL's energy storage shipment mix tilts toward AC integrated solutions, its energy storage unit gross profit (measured in RMB/kWh) will rise significantly. Meanwhile, Goldman Sachs expects CATL to regain dominance in China's energy storage market, with its domestic energy storage battery market share potentially recovering from a low of about 20% in 2025 to 40% by 2030.
Goldman Sachs maintains a Buy rating on both CATL's A-shares and H-shares, with 12-month target prices of RMB 507 and HKD 777 respectively based on a sum-of-the-parts valuation, implying upside of over 100% from current prices (A-shares at RMB 238, H-shares at HKD 357). Goldman Sachs analyst Nick Zheng also noted that the A-share's current forward P/E of approximately 12x is already near the valuation trough of the previous "de-CATL" cycle, and the market is overpricing the risk of "de-CATLization."
Energy Storage Transformation: From Selling Cells to Selling Integrated Solutions, Unit Profitability Set for Major Leap
Goldman Sachs believes CATL's energy storage shipment structure is undergoing a qualitative shift. In the past, CATL primarily delivered products to customers in the form of DC-side cells or battery packs; as the proportion of AC-side integrated solutions gradually increases, its product scope extends upward to power conversion, system integration, and energy management, significantly increasing added value.
Goldman Sachs forecasts that between 2026 and 2030, AC integrated solutions will account for a continuously rising share of CATL's energy storage shipments, driving energy storage unit gross profit up by approximately 1.6 times from current levels. This means that even under a scenario of relatively stable shipment volume growth, improved profit quality will become an important driver of valuation re-rating. Goldman Sachs believes the market's understanding of this transformation process remains insufficient.
Market Share: CATL Poised to Reclaim Leadership in China's Energy Storage Market
In terms of market share trends, CATL's position in China's energy storage battery market has experienced notable fluctuations. Data shows its market share gradually declined from a high of 35% in 2021 to about 20% in 2025. Goldman Sachs expects that, supported by its quality premium and transformation into an AC solution integrator, CATL's energy storage market share will resume an upward trajectory and potentially recover to about 40% by 2030.
Goldman Sachs attributes this share recovery to two drivers: first, compared to competitors, CATL has structural advantages in product quality that can support a certain price premium; second, the transformation toward higher-value integrated solutions will strengthen customer stickiness, thereby consolidating its market position.
Power Batteries: Market Concerns Over "De-CATLization" Are Exaggerated
In the power battery sector, market concerns about "de-CATLization" have resurfaced recently. Goldman Sachs takes a cautious view on this, believing the related worries represent an overreaction. From historical experience, previous battery supplier diversification initiatives announced by multiple automakers including Tesla, Geely, NIO, Li Auto, and XPeng mostly saw reductions or reversals afterward.
From actual data, CATL's share in China's power battery market has remained relatively stable. Goldman Sachs data shows its China market share has held in the range of approximately 44% to 46%, while its overseas market share is trending upward, growing from about 14% in 2021 to approximately 34% in the first eight months of this year. Goldman Sachs believes the long-term trend of global electrification and CATL's technological leadership will support its continued dominant position in the power battery sector.
Valuation: A/H Share Upside Both Exceed 100%, Current Valuation Near Historical Bottom
On valuation, Goldman Sachs employs a sum-of-the-parts (SoTP) framework to value CATL, separately reflecting the different growth characteristics and re-rating potential of its power battery and energy storage businesses.
For A-shares, Goldman Sachs applies an 11x 2027E EBITDA multiple to the power battery and other businesses, and a discounted 2030 EV/EBITDA exit multiple (15x, discount rate 9.5%) to the energy storage business, arriving at a 12-month target price of RMB 507, implying approximately 113% upside from the current price of RMB 238.
For H-shares, considering CATL's superior ROIC, global leadership, and scarcity value, Goldman Sachs applies higher valuation multiples — 17x 2027E EV/EBITDA for the power battery business and a 20x 2030 exit multiple for the energy storage business — resulting in a target price of HKD 777, implying approximately 118% upside from the current price of HKD 357, with an implied H-share premium over A-shares of approximately 40%.
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