智通财经网·2026-01-19 06:48Core Viewpoint - Citigroup's report indicates that CATL (Contemporary Amperex Technology Co., Limited) is facing multiple headwinds as it approaches 2026, raising investor concerns about its growth prospects, including a slowdown in China's electric vehicle sales, rising lithium prices, and a reduction in battery export VAT rebates. However, the firm maintains a "highly confident outperform" rating for CATL's A/H shares, with a target price of 685 RMB / 500 HKD [1][2]. Group 1 - The slowdown in China's electric vehicle sales is already anticipated in market expectations and has been reflected in growth forecasts, thus not surprising the market with negative news [1]. - Strong growth momentum in energy storage batteries is expected to partially offset the negative impact from the slowdown in electric vehicle battery sales [1]. - CATL indicated during a company visit in November that battery shipments in Q1 2026 may remain flat compared to the previous quarter, suggesting an annual growth rate of 60% [1]. Group 2 - The significant rise in lithium prices since the beginning of the year may pose downside risks to battery manufacturers' profit margins in Q1 2026, and price strength may be difficult to alleviate before CATL's Yichun mine resumes production [1]. - Existing contracts should allow CATL to pass on higher lithium prices to customers, but the rapid increase may create a time lag in this transfer [1]. - Given its leading position and strong pricing power, CATL is expected to have a better ability to pass on costs compared to its peers [1]. Group 3 - The impact of the reduction in battery export VAT rebates on CATL's profitability is minimal, estimated at only about 2% [2]. - This limited financial impact suggests that the policy should not affect China's battery exports, maintaining the structural growth logic for energy storage batteries [2]. - CATL's A/H shares are currently trading at a projected P/E ratio of 17x/22x for 2026, which is believed to reflect most market concerns [2]. Group 4 - The firm forecasts a compound annual growth rate of 31% in earnings per share from 2025 to 2027, indicating an attractive risk-reward profile [2]. - The average P/E ratio for CATL's A shares from 2022 to 2025 was 19x, during a period when the battery industry was in a downturn [2]. - With a new upcycle driven by structural growth in energy storage batteries approaching, CATL's valuation is expected to be re-evaluated to exceed its historical average P/E ratio of 19x [2].