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<Research>M Stanley: Mkt Diverges on Battery Demand/ Raw Material Prices; CATL Estimated to Ultimately Outperform Peers
Recommend 9 Positive 9 Negative 2 |
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Auto industry analysts expected weak demand for EVs, implying a slowdown in battery sales growth, according to Morgan Stanley's research report. However, analysts from the materials industry anticipated that the energy storage systems market will drive strong demand, thereby supporting high prices for battery raw materials. The broker believed that this divergence puts pressure on CATL (03750.HK)'s market positioning, raising concerns about its ability to pass on costs and its profit margins. Morgan Stanley considered the above divergence in views to be unreasonable. If demand is indeed weak, CATL should reduce orders, and material prices would not be able to maintain their current strength. CATL's exposure in the premium market, pricing power, and strategic layout in the energy storage systems market should enable it to outperform peers once market sentiment realigns. Therefore, the broker listed CATL's A-shares as its top pick, with a target price of RMB490 and rating at Overweight. AASTOCKS Financial News Website: www.aastocks.com |
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