Southwest Securities: Initiating Coverage on CATL with Buy Rating

Southwest Securities Co., Ltd. Han Chen and Wang Xing recently conducted research on CATL and published the research report “2025 Annual Report Review: High Shipment Growth, Evolution from ‘Product’ to ‘Service’ Model,” giving CATL a “Buy” rating.

CATL (300750)

Investment Highlights

Event: The company is expected to achieve revenue of 423.702 billion yuan in 2025, a year-on-year increase of 17.0%, and net profit attributable to the parent of 72.201 billion yuan, up 42.3%. Non-recurring net profit attributable to the parent is 64.508 billion yuan, up 43.4%. In Q4 2025, revenue reached 140.63 billion yuan, up 36.6% year-on-year and 34.98% quarter-on-quarter; net profit attributable to the parent was 23.167 billion yuan, up 57.1% year-on-year and 24.9% quarter-on-quarter.

High shipment growth and ample cash flow. According to SNE Research data, global new energy vehicle sales in 2025 reached 21.47 million units, a year-on-year increase of 21.5%, and global power battery usage was 1187 GWh, up 31.7%. The company achieved lithium battery sales of 661 GWh in 2025, up 39.16%, with power batteries accounting for 541 GWh, up 41.85%, outpacing industry growth. Cash flow remains strong, with net operating cash flow of 133.2 billion yuan in 2025, up 37.35%. Profitability continues to improve, with net profit margin in 2024 at 14.92% and rising to 18.12% in 2025.

Shift in growth model from “product” to “service.” According to the annual report, the company enhances customer experience through vehicle-electrical separation and battery swapping models, collaborating with Sinopec to build charging networks for passenger vehicles and commercial vehicle logistics. The company has partnered with multiple downstream automakers to launch battery swapping models. By the end of 2025, 1,325 swapping stations have been built, including over 1,000 “Qiaokeli” swapping stations and over 300 “Qiji” swapping stations, gradually evolving from a product output model to an integrated product + service model, with strong future growth potential.

Continually launching new products to strengthen its oligopoly position. In 2025, the company launched the “NaXin” low-temperature battery and the “Xiaoyao” dual-core series that break through the limitations of single chemical systems, addressing issues like short range, slow charging, and rapid degradation. In energy storage, it introduced the “Tianheng” and “TENERStack” large-capacity energy storage systems, optimizing safety and lifespan. Additionally, new products like Shenxing, Qilin, and Xiaoyao batteries are increasing their share, driving profitability.

Profit forecasts and investment advice. EPS is expected to be 19.92 yuan, 24.10 yuan, and 28.98 yuan for 2026-2028, respectively, with corresponding P/E ratios of 20x, 16x, and 14x. The company’s overseas capacity is steadily releasing, new products are continuously launched, capacity expansion is slowing, and dividend payout ratio is leading the industry, entering a period of realization. Maintain a “Buy” rating.

Risk warnings: Macroeconomic and market volatility risks; intensified market competition; risks related to new product and technology development; raw material price fluctuations and supply risks.

Latest profit forecast details are as follows:

In the past 90 days, 22 institutions have given ratings on this stock, with 19 “Buy” and 3 “Hold” ratings; the average target price among institutions over the past 90 days is 518.33 yuan.

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