CATL Shares Gain on Guidance for Jump in 2023 Profit
By Tracy Qu
CATL shares rose after the Chinese electric-vehicle battery giant guided for a better-than-expected jump in 2023 profit, helped by global demand for EVs, power batteries and energy storage.
Shenzhen-listed shares of Contemporary Amperex Technology bucked a selloff in the broader market and were up 7.9% at CNY151.90 Wednesday afternoon--their biggest intraday gain since June last year. That pared losses so far this year to 6.9%.
The Tesla supplier said late Tuesday that expects to post a 38%-48% rise in full-year net profit for 2023, projecting its bottom line at 42.5 billion yuan to 45.5 billion yuan (US$5.94 billion-US$6.36 billion). It cited new products and technology, overseas market expansion and industry growth as reasons for the rise.
Though the projected growth is lower than the 93% surge in net profit that the battery maker posted in 2022, but analysts said it exceeded market expectations.
"This is a beat to the relatively cautious buy-side expectations per our conversations with investors," Citi analysts said in a research note, adding that they "believe the concerns on CATL's battery margins are overdone." They kept a buy rating and CNY313 target price on the stock.
CATL's guidance also topped Nomura analysts' expectations for a profit of CNY42.1 billion. They highlighted sequential growth in the fourth quarter, attributing it increasing shipments at the company's EV and energy-storage systems segments, which offset lower selling prices for batteries.
"We believe the company's overseas expansion strategy is still on track, especially for the European market, where CATL has achieved solid progress of localized production," they wrote in a research note. On the downside, they see "lingering uncertainties" for CATL's bid to tap the U.S. market, citing opposition by some U.S. lawmakers to the Chinese company's involvement in a Michigan battery plant planned by Ford Motor.
CATL was China's top EV-battery maker in December, ahead of BYD and CALB, according to data from China's Automotive Battery Innovation Alliance.
The company's sales have been climbing in recent years amid rising demand for electric vehicles globally. The global EV-battery market figures to be about US$62 billion this year and nearly triple in size by 2029, according to market researcher Mordor Intelligence.
Write to Tracy Qu at tracy.qu@wsj.com
(END) Dow Jones Newswires
January 31, 2024 01:10 ET (06:10 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
For Bond Investors, Delayed Rate Cuts Demand a Different Playbook
-
What’s Happening In the Markets This Week
-
How the Tokyo Stock Exchange Is Pushing for Better Shareholder Returns
-
Magnificent 7 Stocks Earnings Updates: AI Remains the Focus
-
Where We See Opportunities After an Ugly Month for Stocks
-
After Earnings, Is Alphabet Stock a Buy, a Sell, or Fairly Valued?
-
When Will the Fed Start Cutting Interest Rates?
-
What’s the Difference Between the CPI and PCE Indexes?
-
Berkshire Hathaway Earnings: Strong Insurance Results Continue to Lift Revenue and Profitability
-
10 Questions for Berkshire Hathaway’s 2024 Annual Meeting
-
After Earnings, Is Ford Stock a Buy, a Sell, or Fairly Valued?
-
3 Dividend Stocks for May 2024
-
Amgen Earnings: Obesity Drug Update Is Highly Encouraging
-
What’s Going on With Apple, Tesla, and Alphabet?
-
Apple Earnings: A Weak 2024, but Optimism for 2025
-
4 Utility Stocks to Play the AI Data Center Boom