03750

Citi's analyst rating is based on the belief that the battery price uptrend will continue this year, despite relatively weak demand in China's electric vehicle industry. The firm highlights significantly raised expectations for energy storage systems, which have positively influenced the stock performance of related shares. Citi specifically identifies CATL as a top pick, citing its strong risk-reward ratio following price increases in various segments of the industry chain and the lithium sector. The outlook is expected to improve after the Lunar New Year, although there is caution regarding short-term rises in lithium prices.

The analyst rating for SIEYUAN ELEC and CATL is based on their recent collaboration on energy storage, which is expected to significantly expand SIEYUAN ELEC's energy storage system business. JPMorgan believes that if the collaboration's output is fully realized, it could generate approximately RMB20 billion in annual revenue. This positive outlook has led JPMorgan to set a target price of RMB180 for SIEYUAN ELEC and target prices of $650/RMB520 for CATL's H-/A-shares, all rated at Overweight.

The analyst rating from Morgan Stanley is based on the expectation that the continuation of electric passenger vehicle (PV) subsidies in China will support high single-digit growth for the electric vehicle battery industry in 2026. Additionally, the anticipated strong performance of electric trucks and energy storage systems is expected to enhance industry profitability. Morgan Stanley believes that if strong demand leads to rising battery material prices, CATL will be able to manage cost pressures through pricing strategies. Consequently, they have rated CATL's A-shares as their industry top pick with an Overweight rating and a target price of RMB490.

The analyst rating from Citi's research report is influenced by several factors. The report indicates that the planned output of the top five battery manufacturers in Mainland China is expected to shrink by 7% month-over-month in January 2026, with CATL potentially facing a decline of 10%. This decline is attributed not to a decrease in demand, but rather to negotiations between leading battery companies and upstream suppliers. Additionally, some major cathode material manufacturers are planning production halts for maintenance due to rising raw material prices and slim processing fee income, which is linked to the increase in lithium carbonate futures prices. Citi maintains a defensive view on the battery industry chain due to seasonal factors and weak demand for electric vehicles (EVs), leading to uncertainty in the outlook for planned output. Despite these challenges, CATL is highlighted as the sector's top pick, with target prices set for its H shares and A shares.

The analyst rating from Daiwa is influenced by the expectation that while CATL's lithium output may increase, the current lithium futures prices only reflect a short-term improvement in the supply-demand balance. They anticipate an increase in lithium supply in the first half of 2026 and a potential quarter-over-quarter decline in demand in the first quarter of 2026. As a result, Daiwa believes that lithium prices are unlikely to rise further early next year, leading to a cautious outlook on CATL's performance.

The analyst rating of "Outperform" for CATL (03750.HK) is based on several key factors highlighted in the report by CICC. These include: 1. Market Leadership: CATL is recognized as a global leader in power and energy storage batteries, indicating a strong position in the industry. 2. Growth Potential: The company is actively exploring growth opportunities in overseas markets, which suggests potential for expansion and increased revenue. 3. Rising Demand: There is ongoing growth in lithium battery demand driven by emerging application scenarios, which bodes well for CATL's future performance. 4. Competitive Advantage: CATL possesses a solid competitive advantage characterized by excellent profitability and industry-leading technology, reinforcing its ability to maintain and grow its market share. 5. Valuation: The target price of $580 corresponds to a 26.5x PE ratio for 2026, indicating a favorable valuation relative to expected earnings growth. Overall, these factors contribute to a positive outlook for CATL, justifying the "Outperform" rating.