CATL(SZ:300750) Huafu Securities·2024-10-21 10:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark within the next six months [6][13]. Core Insights - The company's operational performance exceeded expectations, with a significant increase in gross margin. In Q3 2024, revenue reached 92.3 billion yuan, down 12% year-on-year but up 6% quarter-on-quarter. The net profit attributable to shareholders was 13.1 billion yuan, up 26% year-on-year and 6% quarter-on-quarter, with a gross margin of 31.2% and a net margin of 15% [1][4]. - The company is experiencing robust growth in energy storage, with Q3 2024 battery shipments expected to reach 125 GWh, a year-on-year increase of 25% and a quarter-on-quarter increase of 14%. Energy storage batteries are projected to grow by 108% year-on-year [2][4]. - Despite market capacity being perceived as excessive, the company continues to innovate high-end, cost-effective products, maintaining stable unit profitability. The forecasted net profit for 2024-2026 is 51.8 billion, 63.7 billion, and 74.6 billion yuan respectively, reflecting growth rates of 17%, 23%, and 17% [4][10]. Financial Performance Summary - In Q3 2024, the company reported a net cash flow from operating activities of 22.74 billion yuan, which is 164% of its net profit, showing strong cash generation capabilities [1]. - The unit net profit for batteries was 0.105 yuan/Wh, with a non-recurring profit of 0.097 yuan/Wh. The report notes that the impact of additional impairment losses on unit profitability was -0.032 yuan/Wh [3][4]. - The company's financial forecasts indicate a revenue of 400.9 billion yuan for 2023, with a growth rate of 22%, and a projected net profit of 44.1 billion yuan, reflecting a 44% increase [10]. Market Position and Competitive Advantage - The company is expected to continue benefiting from the increasing acceptance of its high-end battery products, such as the Kirin and Shenxing batteries, and its comprehensive overseas energy storage layout, which enhances its market competitiveness [2][4]. - The report emphasizes the company's strong pricing power and cost reduction through technological advancements and supply chain optimization, contributing to its improved operational profitability [3][4].