JPMorgan has released a research report downgrading the H-share rating of CATL (3750.HK) to "Neutral," while maintaining its "Overweight" rating on the company's A-shares (300750.SZ). CATL's A-shares are also the only battery stock in the bank's coverage universe to receive an "Overweight" rating.
JPMorgan stated that given the broader redistribution of profits across the electric vehicle supply chain, industry profitability is deteriorating faster than expected. With battery consumption taxes, reduced export tax rebates, and increasing trade barriers, automakers' profits are already under pressure, and CATL may be the first to feel the impact.
However, thanks to its ability to pass on or partially absorb costs, CATL may in the long run strengthen customer stickiness and emerge as the ultimate winner.
JPMorgan noted that CATL's H-shares trade at a premium to its A-shares, reflecting onshore investors' more cautious stance toward policy uncertainty, while global funds are more inclined to bet on its long-term strong growth potential.
Compared with other major banks, Goldman Sachs expects CATL's third-quarter net profit to rise 30% year-on-year to RMB 24 billion. UBS, meanwhile, believes the stock has been oversold and is awaiting catalysts such as capacity expansion at its Hungary plant.