UBS has released a research report stating that, taking into account factors including the decline in CATL's (03750.HK) third-quarter battery unit profit to a historical low and the quarter's net profit falling short of buy-side expectations, UBS has lowered its earnings forecasts for the company for 2026 to 2028 by 11% to 14%, while cutting its price target by approximately 11%, from HK$820 to HK$730. The "Buy" rating is maintained.

The report stated that CATL (03750.HK) recorded a third-quarter net profit of RMB 21.2 billion. Although this represented a year-on-year increase of 15%, it declined 6% quarter-on-quarter and fell about 10% short of buy-side expectations. Cumulative net profit for the first three quarters reached RMB 64.5 billion, equivalent to only 62% to 67% of both market and UBS full-year forecasts, which could potentially trigger downgrades to full-year earnings expectations.

After excluding non-recurring gains and losses, third-quarter net profit was RMB 18.9 billion, down 10% quarter-on-quarter.

The report stated that although the company's third-quarter battery sales volume exceeded 260 GWh, the unit profit calculated on this basis fell to a historical low of RMB 82 per kilowatt-hour. This was primarily driven by changes in product mix, an increase in low-value-added businesses, and policy and structural headwinds including the reduction in the lithium battery consumption tax and export tax rebate rate starting from September.

However, management remains confident that the industry will maintain expansion of 20% to 30% in 2027.