CATL shares snap five-day losing streak, close 2.53% higher at 304.63 yuan

On September 22, CATL closed up 2.53% at 304.63 yuan, ending a five-day losing streak. The stock recorded a full-day trading volume of 14.477 billion yuan, a turnover rate of 1.11%, and a dynamic price-to-earnings (P/E) ratio of 16.28 times.

In the previous trading session, CATL's stock price had fallen to an intraday low of 295.50 yuan, hitting a nearly one-year low. From its intraday high of 467.34 yuan on May 7, the company's total market capitalization (A+H shares) has evaporated by more than 700 billion yuan. The term "de-Ninghua" (reducing reliance on CATL) has become a hot topic of market discussion.

How Should We View CATL?

In my view, "de-Ninghua" should not be simply equated with "abandoning the king." Its essence is actually a rebalancing of the supply chain.

Based on publicly disclosed corporate actions, automakers' strategies are highly consistent: for mid-range, high-volume models, they are introducing second and third suppliers; for high-end flagship models, they still rely on CATL.

Several cases illustrate the "rationality" of this approach:

• Li Auto: Uses Xinwangda battery cells, but the first batch of the new Li Mega still uses CATL's 5C ternary lithium batteries.
• Xiaomi Auto: Officially announced CALB and Xinwangda Power as strategic partners. The main models SU7 and YU7 still retain CATL, but the Pengcheng series range-extender models will be fully equipped with Long Arm batteries, with CATL not participating in this series.
• Seres: Introduced Gotion High-tech's 81 kWh battery pack, and CALB will also enter the AITO supply system.
• XPeng Motors: (Details not specified in the original text.)

The reality is that almost no leading automaker has completely stopped using CATL. They are merely reducing order proportions and switching suppliers for certain models.

Objectively speaking, CATL remains the world's largest power battery supplier.

"De-Ninghua" is essentially a manifestation of profit imbalance within the value chain. While this is the root cause, there is currently almost no viable alternative to CATL.

The Root Cause: Profit Imbalance

The fundamental driver for automakers seeking supply chain diversification is the severe imbalance in upstream and downstream profits.

In the first half of 2026, CATL alone posted a net profit of 43.284 billion yuan, averaging approximately 240 million yuan per day. In contrast, the combined net profit of the top 12 domestic automakers by revenue was only about 19.3 billion yuan, less than half of CATL's.

During the same period, the average profit margin in the automotive industry fell to a historic low of 3.4%, while CATL's net profit margin has long remained above 17%.

Limited Impact on Market Share

However, "de-Ninghua" has had a limited impact on CATL's market share.

In 2025, CATL held a 43.42% domestic market share with 333.57 GWh of installed capacity, firmly ranking first. BYD's market share fell by 3.17 percentage points. Among second-tier manufacturers, Gotion High-tech's market share increased by 1.07 percentage points to 5.65%, while EVE Energy also saw gains.

CATL's Chief Manufacturing Officer Ni Jun previously responded to "de-Ninghua" by stating: "Knowing how to build a car does not necessarily mean knowing how to build a battery. Professionals should still do professional work."

Key Financial Data

• 2025 Full Year: Revenue of 423.7 billion yuan, up 17% year-on-year; net profit attributable to shareholders of 72.2 billion yuan, up 42%.
• First Half of 2026: Revenue of 276.917 billion yuan, up 54.80% year-on-year; net profit attributable to shareholders of 43.284 billion yuan, up 41.98%; non-GAAP net profit of 39.013 billion yuan, up 43.44%; operating cash flow of 60.217 billion yuan.

Globally, according to SNE Research, CATL's global power battery usage market share increased by 1.2 percentage points to 39.2% in 2025, ranking first worldwide for nine consecutive years. Its overseas market share rose to 30%. The company's energy storage battery production has ranked first globally for five consecutive years.

From a financial perspective, CATL's current financial position is quite strong.

Share Buyback Program

To express confidence in the company's prospects, CATL launched a share buyback program in July 2026, with a total value of 20 billion to 40 billion yuan. All repurchased shares will be cancelled to reduce registered capital, with a buyback price cap of 573 yuan per share.

• September 11: First buyback executed.
• September 18: Repurchased 1.5126 million shares (approximately 456 million yuan).
• September 21: Repurchased 3.6875 million shares (approximately 1.1 billion yuan).

The company has continuously executed buybacks during the period of sustained stock price pressure.

Will the Buybacks Stabilize the Stock Price?

Currently, CATL's P/E ratio is only around 16 times, which generally offers good value. However, it is not without risks.

Risks

Geopolitical and Overseas Policy Barriers are the primary concern. CATL's 2025 annual report shows that overseas revenue accounts for approximately 30.5% of total revenue. As Europe and the U.S. push for localization of the power battery supply chain, this portion of revenue faces increasingly high policy barriers.

Intensified Industry Competition and the resulting pressure on profit margins cannot be ignored. Second-tier battery manufacturers are improving product quality, and their competitive advantages are no longer limited to pricing.

Opportunities

Energy Storage Business is a key growth driver. In the first half of 2026, CATL's combined sales of power and energy storage batteries increased by approximately 60% year-on-year, with energy storage batteries accounting for about one-quarter of sales. The 587Ah large-format energy storage cell has achieved规模化 delivery.

Global Production Capacity Expansion: The German factory achieved profitability in 2025. The Hungarian factory is scheduled to begin production in early 2026. The Spanish joint venture factory, with an annual capacity of 50 GWh, is expected to start production by the end of 2026. The Indonesian battery supply chain project is also progressing as planned.

Battery Swap Business has also made substantial progress. In 2025, CATL built 1,020 "Chocolate" battery swap stations and 305 "Qiji" battery swap stations, totaling 1,325 stations. In 2026, the "Chocolate" battery swap program plans to build over 3,000 stations across more than 140 cities.

What Should Investors Do Now?

At the current stock price of 304.63 yuan, the dynamic P/E ratio of 16.28 times is at the lower end of the valuation range since the company's listing.

• Morgan Stanley has set a target price of 576 yuan for CATL's A-shares.
• Citigroup has also listed CATL as a "preferred stock," maintaining a "buy" rating with an A-share target price of 576 yuan. The bank believes that market concerns about battery demand are excessive and that the current stock price offers an attractive valuation opportunity.

In my view, in addition to monitoring whether CATL's stock price trend has changed, investors should focus on three key issues:

1. The progress and profitability of overseas production capacity – This will determine whether CATL can break through the geopolitical ceiling.
2. Whether the energy storage business can sustain high growth – This will help fill the potential gap left by slowing growth in the power battery segment.
3. Whether technological leadership can continue to support above-industry profit margins – This is crucial for maintaining competitive advantage.

The real challenge for CATL is to become a "consistently leading innovator" in an increasingly competitive market. This tests both the company's technological strength and investors' judgment.

The market analysis, forecasts, and other content in this article represent the author's views only and do not constitute investment advice to readers. Investors should make independent decisions based on their own risk tolerance.

Author: Guang Yun (Source: IPO Daily)