Morgan Stanley — CATL (300750.SZ): What the Market Is Missing
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Morgan Stanley argues the market underestimates CATL's earnings resilience across the cycle. Concerns about soft Chinese electric passenger vehicle demand overlook strength in commercial vehicles, Europe and other overseas markets, and diversified growth in energy storage, which remains robust on grid flexibility needs and elevated natural gas prices. The firm believes CATL's technology leadership delivers a total cost of ownership (TCO) advantage that supports a persistent profit premium over second-tier battery makers. It views CATL as having built a global consumer brand: 37.1% of surveyed Chinese buyers would consider walking away from a purchase if the vehicle lacked a CATL battery. The company holds about 70% of the NCM battery market and roughly 98% share among models priced above Rmb400,000. Domestic ePV battery installations grew 12% year over year, and commercial-vehicle battery sales are expected to rise 50% in 2027, with Europe up 25% and the rest of the world ex-China/US up 40%. A new product cycle in sodium-ion and condensed-matter batteries is starting. Targets were cut to Rmb500 (300750.SZ) and HK$705 (3750.HK); both rated Overweight.
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