What’s new: Chinese battery maker Contemporary Amperex Technology Co. Ltd. (CATL) (300750.SZ) topped 1 trillion yuan ($157 billion) in market cap Monday as the electric vehicle boom drives up battery demand.
CATL closed at 434.1 yuan a share Monday, giving it a market value of nearly 1.01 trillion yuan. It was the first company on the tech-focused ChiNext board in Shenzhen to reach that mark and the eighth in the entire Chinese mainland stock market. CATL closed 2% lower Tuesday at 425.34 yuan.
CATL is China’s largest electric vehicle battery maker, accounting for more than 50% of the market. It also topped the global market for four consecutive years.
But some analysts said the company is overvalued. Morgan Stanley said Monday that the company’s price-to-earnings ratio exceeded 74 times based on its forecast of 2022 earnings. The investment bank set CATL’s target price at 251 yuan and rated it “underweight.”
The context: While Morgan Stanley warned that investors overestimate CATL’s growth potential, many analysts remained upbeat on the company’s outlook, citing rising demand for electric cars.
EV sales in China may climb more than 50% this year as the country steps up the push to reduce carbon emissions, research firm Canalys estimates.
In the January-April period, CATL’s sales almost quadrupled to 21.4 gigawatt-hours, the company said. The company’s shares have climbed fivefold in the past two years as it has steadily become battery supplier de rigueur to the world’s biggest luxury automakers — including BMW, Volkswagen and Mercedes-Benz.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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