Leading Batterymaker CATL Riding on Electric Vehicle Tailwind; Initiate With FVE of CNY 424

We initiate coverage on Contemporary Amperex Technology, commonly known as CATL, with a no moat rating and fair value estimate of CNY 424 per share. As the largest lithium-ion battery producer, we believe CATL will continue to benefit from the global vehicle electrification trend. Our fair value estimate implies a forward price/earnings ratio of 27 times, which is justified by 47% three-year net profit CAGR.