On October 20, CATL (03750.HK) Hong Kong shares plunged more than 7% at one point during intraday trading, touching a low of HK$408.6, marking a fresh 14-month trough. Its A-shares weakened in tandem, with morning losses briefly exceeding 3%, following five consecutive trading days of declines that accumulated a 10.51% drop over the period.

The latest selloff stems from a combination of demand expectations, earnings concerns, and shifts in the industry landscape. On the demand side, Citi previously cited ZE Consulting data showing that the top five battery makers' October production pipeline rose only 1% month-on-month, far below the expected 7%, confirming signs of weakening underlying battery demand. Dongwu Securities also noted that the market continues to price in concerns over a demand slowdown in 2027 and weaker production schedules in November and December. On the earnings front, JPMorgan summarized market worries about battery stocks as having "shifted from demand to profitability," and downgraded CATL's H-share rating to "Neutral" accordingly. Goldman Sachs estimated that the company's third-quarter unit net profit could decline from 97 yuan/kWh in the second quarter to 93 yuan/kWh, with falling lithium carbonate prices combined with high inventory levels further amplifying impairment concerns. Additionally, rumors about automakers diversifying their supply chains continued to swirl, with reports suggesting CATL would respond in the coming days to speculation that "certain automakers are choosing other power battery suppliers."

Facing pressure on its share price, CATL repurchased 186,700 A-shares on the Shenzhen Stock Exchange on October 19, involving approximately 49.99 million yuan, at prices ranging from 267.58 to 267.88 yuan per share. On the same day, the company's third-quarter results were officially released, with the market awaiting substantive validation of its earnings resilience from this financial report.

Institutional views showed clear divergence. On the bearish side, JPMorgan turned cautious; however, most major banks maintained positive ratings even as they lowered target prices. Citi kept its "Buy" rating, cutting its H-share target price from HK$888 to HK$765 and its A-share target price to 500 yuan, believing that "the situation is not as pessimistic as the market expects." Morgan Stanley maintained its "Overweight" rating on the A-shares, arguing that the market underestimates the company's cross-cycle earnings support factors. Dongwu Securities pointed out that the sector's core leaders have seen valuations adjust to 10-12 times, with high-level corrections exceeding 50%, and some negative factors have gradually been priced in.