Nomura: Contemporary Amperex Technology (300750) Earnings Beat on Strong Margins in 4Q25
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Nomura maintains a Buy rating on Contemporary Amperex Technology (300750), raising the target price from CNY465 to CNY476, implying 33.1% upside potential. The upgrade follows a strong fourth-quarter performance where net profit surged 57% year-on-year to CNY23.2 billion, exceeding both Nomura's estimate by 13% and the Bloomberg consensus by 17%. This earnings beat was primarily driven by better-than-expected gross margin expansion to 28.2%, up 1.7 percentage points year-on-year and 2.4 percentage points quarter-on-quarter, reflecting further cost reductions.
Full-year 2025 battery shipments demonstrated robust growth. EV battery volumes reached 541GWh, a 42% increase, while energy storage system sales grew 29% to 121GWh. The company declared a final dividend of CNY6.957 per share, representing a 50% payout ratio for FY25. Capacity utilization remained exceptionally high at 97% by year-end.
Nomura expects cost inflation impacts to remain manageable in FY26, noting CATL's superior ability to pass some cost pressures downstream compared to peers. The bank raised its FY26-27F revenue forecasts by 11-12% to reflect higher average selling prices, while lowering gross margin estimates by 1.7 percentage points each year. Net profit forecasts were revised upward by 2.5-4.8%. The revised target price of CNY476 is based on 25x FY26F EPS of CNY23.16, or 1.2x FY26F PEG. At the current valuation of 19x FY26F P/E, Nomura considers the stock inexpensive.