<Research> M Stanley: Concerns Over CATL (03750.HK) Appear Exaggerated; Share Price Has Yet to Reflect Fundamental Improvement
The broker believes recent positive fundamentals have yet to be reflected in the share price, including accelerating growth in energy storage deployment, strong tender activity and implementation of capacity pricing policies, faster electrification of trucks amid elevated diesel prices, and China's anti-involution push driving industry consolidation.
The broker added that the company has around 30% return on equity and around 50% return on invested capital, while the current valuation appears to imply a sharp earnings decline next year, contrasting with management guidance for earnings growth of over 25% by 2027.
Drivers such as faster EV penetration in Europe, electrification of commercial fleets and rising global energy storage demand are also improving rather than deteriorating.
If manufacturers were required to absorb all costs themselves, more than 30% of industry capacity could fall into negative cash profitability. Against a backdrop of tightening supply and capacity reduction, industry conditions should support cost pass-through.
Source: AAstocks.com
https://www.aastocks.com/en/stocks/news ... -news/AAFN
