CATL(SZ:300750) Huajing Securities·2024-04-21 05:32Investment Rating - The report maintains a "Buy" rating for the company with a target price raised to RMB 244.10 from RMB 236.60 [2][11]. Core Insights - The company's Q1 2024 earnings exceeded expectations, with a gross margin of 26.4% and a net margin of 13.2%, reflecting year-on-year increases of 5.1 and 2.2 percentage points respectively [2][3]. - Despite a decline in revenue due to falling raw material prices, the company improved its cash flow significantly, achieving operating cash flow of RMB 283.6 billion, a 35% year-on-year increase [2][3]. - The company captured a domestic market share of 48.9% in the power battery segment, benefiting from the launch of new models [2][3]. Financial Performance Summary - Q1 2024 revenue was RMB 797.7 billion, down 10.4% year-on-year and 24.9% quarter-on-quarter, primarily due to lower sales prices from raw material price declines [2][8]. - The gross profit for Q1 2024 was RMB 21.072 billion, with a gross margin of 26.4%, up from 21.3% in Q1 2023 [8]. - The net profit attributable to shareholders was RMB 10.51 billion, representing a 7.0% year-on-year increase [8]. Earnings Forecast - The report maintains revenue forecasts for 2024-2026 but raises gross margin estimates by 1.7, 1.0, and 0.6 percentage points to 24.0% for 2024, 2025, and 2026 respectively [3][9]. - The net profit forecasts for 2024-2026 are adjusted upwards by 3.2%, 3.0%, and 0.8% to RMB 488.1 billion, RMB 578.2 billion, and RMB 617.3 billion respectively, indicating year-on-year growth of 10.6%, 18.5%, and 6.8% [3][9]. Valuation - The report maintains a valuation of 22 times earnings for 2024, reflecting the company's strong market position and cash flow capabilities [11]. - The target price of RMB 244.10 suggests a potential upside of 24% from the current share price of RMB 197.14 [7].