CATL(SZ:300750) Tai Ping Yang·2024-10-24 02:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on the last closing price of 250.55 [1][8]. Core Views - The company's Q3 2024 performance shows a significant increase in gross margin, with a quarter-on-quarter rise of 4.5 percentage points to 31.2%. This improvement is attributed to a larger decrease in raw material prices compared to product prices and the premium from new technology products [3][4]. - The company reported a Q3 revenue of 92.278 billion yuan, a year-on-year decrease of 12.48% but a quarter-on-quarter increase of 6.07%. The net profit attributable to shareholders was 13.136 billion yuan, up 25.97% year-on-year and 6.32% quarter-on-quarter [3][4]. - The report highlights that the company has made a significant asset impairment provision of 4.74 billion yuan, primarily related to lithium carbonate, which is expected to enhance future earnings elasticity [3][4]. - The company’s energy storage battery shipments are estimated to have increased by approximately 15% quarter-on-quarter, with new products expected to continue gaining market share, thereby maintaining strong profitability [3][4]. - The company is advancing its overseas factory projects, with expectations of improved global competitiveness. The German factory is projected to break even in 2024, and the Hungarian factory is expected to commence production in 2025, benefiting from the anticipated growth in the European market for power batteries [3][4]. Summary by Sections Financial Performance - Q3 2024 revenue: 92.278 billion yuan, YoY -12.48%, QoQ +6.07% - Q3 2024 net profit: 13.136 billion yuan, YoY +25.97%, QoQ +6.32% - Q3 2024 non-recurring net profit: 12.122 billion yuan, YoY +28.58%, QoQ +12.18% [3][4]. Future Projections - Revenue forecasts for 2024, 2025, and 2026 are 353.899 billion yuan, 401.047 billion yuan, and 539.259 billion yuan, respectively, with growth rates of -11.73%, +13.32%, and +34.46% [4]. - Net profit projections for the same years are 50.689 billion yuan, 63.570 billion yuan, and 90.208 billion yuan, with growth rates of +14.89%, +25.41%, and +41.90% [4]. Market Position - The company is expected to benefit from the increasing demand for power batteries in Europe due to stricter carbon emission regulations set for 2025, which will likely lead to more cost-effective vehicle models being launched by automakers [3][4].