CATL (300750.SZ/3750.HK): Beyond Cells, Into Energy Solutions; Initiate at Buy

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CATL (300750.SZ/3750.HK): Beyond Cells, Into Energy Solutions; Initiate at Buy

EQUITY RESEARCH | 9 July 2026 | 3:00AM HKT

CATL (300750.SZ/3750.HK)

Beyond Cells, Into Energy

Solutions; Initiate at Buy

We initiate CATL, the world’s largest battery manufacturer, at Buy on both H/A-shares, with 12m TPs of HK$946/Rmb566,

implying 51%/57% upside. Our differentiated view centers on its battery energy storage systems (BESS): the market sees

incremental volume, while we see a strategic integration push that can lift margins, earnings quality, share and valuations,

supported by a deepening moat vs Chinese battery peers built on years of cost, technology leadership, and ecosystem

build-out.

CATL’s battery scale, cost and technology leadership, reinforced by strategic ecosystem investments, provide a strong

foundation for its underappreciated transition to an integrated BESS provider. As front-loaded demand drives ESS

cyclicality toward 2028E and performance gaps expose weaker suppliers, China’s fragmented ESS battery market is ripe for

consolidation. We expect CATL’s domestic ESS battery share to double from 20%+ in 2025 to 40% by 2030E. Forward

integration and high-margin, recurring long-term service agreements (LTSAs) will enable greater project value capture,

bolstering margins and earnings quality through cycles.

EV batteries remain a structurally expanding market and CATL’s core earnings anchor, with China EV battery shipments

projected to grow at a +17%, 2025-30E CAGR to 2.64TWh. After regaining share YTD in China and globally, we expect

CATL’s China share trajectory to become more resilient, trending toward ~50% by 2030E from 46%/49% in 2025/26E.

We use a SoTP valuation framework to reflect power batteries and BESS’ different growth profiles, rerating potential from