Citigroup has issued a research report in which it raised its price target for the A-shares of Contemporary Amperex Technology Co., Ltd. (300750.SZ) from RMB 576 to RMB 603.

Concurrently, applying a historical H/A-share premium of 28%—reflecting the scarcity value of this global battery leader in offshore markets—the bank increased its target price for CATL's (03750) H-shares from HK$621 to HK$888. It maintained its "Buy" rating and continues to list the stock as its top pick within the sector.

The new H-share target implies a 2026 fiscal year forward price-to-earnings ratio of 34.3 times and a price-to-book ratio of 8.7 times.

Following CATL's first-quarter results announcement, the bank updated its financial model, raising its net profit forecasts for fiscal years 2026 to 2028 by 9%, 9%, and 7% respectively, to RMB 103 billion, RMB 126 billion, and RMB 149 billion.

Although its unit gross margin forecast has been lowered, the bank has increased its battery sales volume projections. It anticipates the company's battery production and sales will reach the milestones of 1.2 terawatt-hours and 1.0 TWh in fiscal 2026, representing year-on-year growth of 61% and 54%, respectively.

Despite the high base, the bank expects CATL's battery production and shipments to remain robust in the second half of the year, with demand for Energy Storage Systems highlighted as a bright spot.

The report also noted that, in the near term, a lithium carbonate price above RMB 200,000 per tonne is unlikely to destroy demand; conversely, a higher lithium price would serve as evidence of solid demand.

Citigroup forecasts the company's second-quarter net profit for fiscal 2026 to reach RMB 24.3 billion, corresponding to battery sales of 260 gigawatt-hours, representing year-on-year growth of 77% and quarter-on-quarter growth of 29%.