Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Equity Bottom-Up

Contemporary Amperex Technology (CATL) / Equity Bottom-Up

<ul>
<li>2Q24 results were decent, with 13% YoY growth in net income to CNY12.4 billion, but share price continues to drift down as market fears western nations resistance to Chinese EVs </li>
<li>Operationally, things are just fine , CATL will add 153GWh capacity in 2H24 across China, Europe, and the U.S.A. - and they are finding solution around the 2026 new tariffs  </li>
<li>Our fair value of CNY253 (+43% UPSIDE) is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations</li>
</ul>


2Q24 results were decent, with 13% YoY growth in net income to CNY12.4 billion, but share price continues to drift down as market fears western nations resistance to Chinese EVs 
Operationally, things are just fine , CATL will add 153GWh capacity in 2H24 across China, Europe, and the U.S.A. - and they are finding solution around the 2026 new tariffs  
Our fair value of CNY253 (+43% UPSIDE) is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations


Contemporary Amperex Technology (300750 CH): Cheap Valuations on Negative Sentiments

<ul>
<li>CATL announced its 1Q24 net profit of CNY9.2B (+19% YoY), which straight out blew past market expectations </li>
<li>The fear of ever-declining battery prices is overstated, as CATL has clearly shown it can take lower margins and boost ROEs via higher inventory turnover and high utilisation rates  </li>
<li>Our fair value of CNY253 <strong>(+27% UPSIDE)</strong> is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations </li>
</ul>


CATL announced its 1Q24 net profit of CNY9.2B (+19% YoY), which straight out blew past market expectations 
The fear of ever-declining battery prices is overstated, as CATL has clearly shown it can take lower margins and boost ROEs via higher inventory turnover and high utilisation rates  
Our fair value of CNY253 (+27% UPSIDE) is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations 


Contemporary Amperex Technology (300750 CH) 1Q24 Better than Expected

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Contemporary Amperex Technology (CATL) / Event-Driven

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.</li>
<li>There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.
There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.


Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Making EV itself doesn't make money, which is why independents like Nio and XPeng are thinking alternative ways to breakeven;</li>
<li>Tesla envisioned to make money through scale, of which BYD bettered. Tesla also envisioned to make money from autonomous driving (ADS);</li>
<li>Nio plans to sell its battery swapping service while XPeng is selling ADS to Volkswagen. Both are experiments aiming at breakeven. Both also have new models to launch.</li>
</ul>


Making EV itself doesn't make money, which is why independents like Nio and XPeng are thinking alternative ways to breakeven;
Tesla envisioned to make money through scale, of which BYD bettered. Tesla also envisioned to make money from autonomous driving (ADS);
Nio plans to sell its battery swapping service while XPeng is selling ADS to Volkswagen. Both are experiments aiming at breakeven. Both also have new models to launch.


New Experiments in China's Crowded EV Space

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net BUY RMB 2.3bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought CATL, Shenzhen Mindray, some financials.</li>
<li>As outperformed Hs on Monday and Tuesday (when both were open), then Hs rocketed on Thursday and Friday. As will have to catch up early in the week.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 2.3bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought CATL, Shenzhen Mindray, some financials.
As outperformed Hs on Monday and Tuesday (when both were open), then Hs rocketed on Thursday and Friday. As will have to catch up early in the week.


Mainland Connect NORTHBOUND Flows (To 30-Apr/3-May 2024): Big Volumes, Low Net; As Will Play Catchup

China

Contemporary Amperex Technology Co., Limited. operates as a battery products manufacturing company. The Company produces and sells power battery materials, energy storage batteries energy storage battery cells, systems, and other products. Contemporary Amperex Technology also provides batteries recycling services.

Contemporary Amperex Technology (CATL) (300750 CH)

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Contemporary Amperex Technology (CATL) (300750 CH)

Contemporary Amperex Technology (300750 CH): Cheap Valuations on Negative Sentiments

CATL's 2Q24 results were good and the outlook is equally encouraging. But share price drift downwards due to negative sentiment. Fundamentals...

Mohshin Aziz

Contemporary Amperex Technology (300750 CH) 1Q24 Better than Expected

CATL's 1Q24 net profit exceeded expectations, showing it can maintain profitability despite fears of declining battery prices. Fair value suggests...

Mohshin Aziz

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

Weaker volumes, lower nets. NORTHBOUND now clearly buying CATL and Luxshare and finance and utilities. Selling some tech. The question which arises...

Travis Lundy

New Experiments in China's Crowded EV Space

Chinese EV makers are trying to breakeven by trying new business models and launching new cars. We believe they have challenges. Buying battery...

Blue Lotus Research Institute

Mainland Connect NORTHBOUND Flows (To 30-Apr/3-May 2024): Big Volumes, Low Net; As Will Play Catchup

NORTHBOUND saw net buying and in general A-shares outperformed HK stocks on Monday and Tuesday, but mainland markets were closed the rest of the...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Contemporary Amperex Technology (300750 CH): Cheap Valuations on Negative Sentiments

​CATL's 2Q24 results were good and the outlook is equally encouraging. But share price drift downwards due to negative sentiment. Fundamentals...

Mohshin Aziz

Contemporary Amperex Technology (300750 CH) 1Q24 Better than Expected

​CATL's 1Q24 net profit exceeded expectations, showing it can maintain profitability despite fears of declining battery prices. Fair value suggests...

Mohshin Aziz

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

Weaker volumes, lower nets. NORTHBOUND now clearly buying CATL and Luxshare and finance and utilities. Selling some tech. The question which arises...

Travis Lundy

New Experiments in China's Crowded EV Space

Chinese EV makers are trying to breakeven by trying new business models and launching new cars. We believe they have challenges. Buying battery...

Blue Lotus Research Institute

Mainland Connect NORTHBOUND Flows (To 30-Apr/3-May 2024): Big Volumes, Low Net; As Will Play Catchup

NORTHBOUND saw net buying and in general A-shares outperformed HK stocks on Monday and Tuesday, but mainland markets were closed the rest of the...

Travis Lundy

CATL's 2Q24 results were good and the outlook is equally encouraging. But share price drift downwards due to negative sentiment. Fundamentals...

CATL's 1Q24 net profit exceeded expectations, showing it can maintain profitability despite fears of declining battery prices. Fair value suggests...