JPMorgan has issued a research report maintaining its "Overweight" rating on CATL (03750) with a target price of HK$725.

The company's stock price has fallen 17% cumulatively this month, underperforming the Hang Seng Index which declined 2% over the same period. This underperformance is primarily attributed to market concerns over OEM supply diversification, slowing demand, and intensifying competition.

The bank believes the market is overly focused on short-term price and market share trends.

JPMorgan cited a NielsenIQ global new energy vehicle consumer survey from September this year, which showed that CATL's trust levels in China and overseas markets reached 81% and 75% respectively, leading the second-ranked brand by 4 and 8 percentage points.

79% of respondents indicated that a recognized high-quality battery brand would increase their willingness to purchase, while 76% are willing to pay a premium. Furthermore, 37% of Chinese consumers said they would reconsider their purchase if their preferred vehicle model does not use CATL batteries.

The bank also noted that the quality of energy storage systems is becoming a driver of revenue and internal rate of return, rather than being purely a cost consideration.

CATL's equipment price gap with peers is generally less than 5% of total project costs.