CLSA has released a research report reaffirming CATL (03750) as its top pick in the global battery sector, maintaining an "Outperform" rating with target prices of RMB 460 for A-shares and HK$670 for H-shares.

The report noted that despite recent concerns over 2027 energy storage demand, frontline representatives indicated that sodium-ion batteries for energy storage are currently more expensive than lithium iron phosphate batteries, but as production capacity expands during 2027 to 2028, sodium-ion battery costs will decline and become more competitive in the future.

The investment bank added that China's internal energy storage sales forecast for 2027 remains strong. Although demand from industrial and commercial customers has slowed in recent months, the magnitude has not reached alarming levels. Internal guidance should be well above 10% year-on-year growth, in stark contrast to expectations of a year-on-year decline from some domestic brokerages, suggesting the market may be overly pessimistic.

Another industry representative pointed out that sodium-ion is not a replacement for lithium-ion, and the company may launch energy storage products that simultaneously adopt both chemistries, allowing the two to complement each other.

The investment bank previously believed that CATL's current share price already reflects a 12% downward revision to 2027 consensus earnings, implying only 6% growth. The current valuation and the above feedback support the bank's continued positive view on the company.