CATL(300750)2024-07-29 00:31Investment Rating - Buy (maintained) [2] Core Views - Q2 performance met expectations, with energy storage driving growth and stable profitability [2] - Revenue for 24H1 was RMB 1667.67 billion, down 11.88% YoY, while net profit attributable to shareholders increased by 10.37% YoY to RMB 228.65 billion [2] - Q2 revenue was RMB 869.96 billion, down 13.18% YoY but up 9.06% QoQ, with net profit attributable to shareholders increasing by 13.40% YoY and 17.56% QoQ to RMB 123.55 billion [2] - Energy storage battery sales accounted for over 20% of total battery sales in Q2, with the company maintaining its global leadership in energy storage battery shipments [2] - Gross margin in Q2 was 26.64%, up 0.23 ppts QoQ and 4.68 ppts YoY, while net margin was 15.73%, up 1.69 ppts QoQ and 4.36 ppts YoY [2] - Strong cash flow with Q2 operating cash flow of RMB 163.51 billion, up 1.53% YoY, and cash reserves of RMB 2550 billion at the end of Q2 [2] - Global market share in power batteries reached 37.5% in the first five months of 2024, up 2.3 ppts YoY [2] Financial Performance - Revenue for 2024E is projected at RMB 4054.89 billion, with a growth rate of 1.14% YoY [4] - Net profit for 2024E is forecasted at RMB 503.60 billion, with a growth rate of 14.14% YoY [4] - EPS for 2024E is expected to be RMB 11.45, with a P/E ratio of 17X [4] - ROE (diluted) for 2024E is projected at 21.90% [4] Market Data - Total market capitalization is RMB 8329 billion, with a total share capital of 4.399 billion shares [6] - The stock price range over the past year was between RMB 140.40 and RMB 251.33 [6] Profitability - Gross margin for 2024E is expected to be 24.0%, with an EBITDA margin of 23.4% [12] - ROE (diluted) for 2024E is projected at 21.9%, with an ROA of 7.5% [12] Valuation - The current P/E ratio for 2024E is 17X, with a P/B ratio of 3.6X [4] - EV/EBITDA for 2024E is projected at 10.0X [12] Industry and Company Outlook - The company's LRS asset-light model is helping to expand overseas markets, with the "CATL inside" brand enhancing its market presence [3] - Overseas factories in Germany and Hungary are expected to improve profitability, with the German factory aiming for breakeven in 2024 [3] - The company's strong technological, customer, and scale advantages are expected to further increase its market share [3]