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<Research>JPM Downgrades CATL (03750.HK) to Neutral on Valuation, Raises TP to $415
Recommend
15
Positive
30
Negative
20
CATL (03750.HK)'s 2Q25 sales volume was approx. 150 GWh, with a net profit of about RMB16.5 billion, both beating JPMorgan's expectations, according to JPMorgan's research report.

However, the better-than-expected performance might have been anticipated by the market, as the Company's H-/ A-shares have risen by 24%/ 10% each over the past 9 trading days, while the HSI leaped by 4% during the same period. Currently, CATL's H-shares had a premium of over 40% over its A-shares.

Related NewsM Stanley Gauges 80%+ Odds of CATL's (300750.SZ) Stock Rise in Next 30 Days
The broker lifted its earnings forecast for CATL by 5% to reflect its higher-than-expected results, and raised its target price for the Company's H-shares from $400 to $415, equivalent to a consolidated PE ratio of 20x for 2026/ 2027.

Considering that the H-shares have spiked 62% in total since listing, the valuation has become reasonable (H-shares are equivalent to projected 2025/ 2026 PE ratios of 26.9x/ 22x respectively).

Therefore, JPMorgan downgraded CATL from Overweight to Neutral, emphasizing that this downgrade is purely based on valuation considerations.

Related NewsG Sachs Downgrades CATL (03750.HK) to Neutral on Valuation, Hikes TP to $436
CATL's A-shares (300750.SZ) remained the broker's top pick in China's battery sector, with rating kept at Overweight. Its current valuation is equivalent to projected 2025/ 2026 PE ratios of 19.1x/ 15.7x.
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