CONTEMPORARY AMPEREX TECHNOLOGY(300750)：CATL WILL SUPPLY 123GWH OF BEV BATTERIES TO HONDA BY2030 ENHANCING ITS GLOBAL LEADING POSITION

Event: On December 8, Contemporary Amperex Technology Co., Limited (“CATL”) announced that Honda will buy 123GWh of CATL's batteries for pure electric vehicles in China between 2024 and 2030. The lithium-ion battery modules will be bought by HDG from CATL and sold to Honda's Chinese affiliates respectively.
CATL has secured Honda's orders from 2024-2030, further deepening the two companies' partnership. Honda plans to launch 30 pure electric vehicles in the global market by 2030 and achieve a planned annual production of over 2 million vehicles. In China, Honda plans to launch 10 electric vehicles by 2027, and new models after 2030 will be 100% electrified. Honda has already signed a cooperation agreement with CATL in 2020, and CATL's 123GWh battery supply this time further secured Honda's demand in 2024-2030, corresponding to about 2 million vehicles and an average annual shipment of 18GWh as expected. For the battery factories, 2022-2024 is a window period to get the orders in 2025-2030. With the leading technology and cost advantages, CATL has already announced a strategic cooperation with Ford, Tesla, BMW, etc. CATL's global market share is expected to further increase in the future as the cooperation with overseas customers deepens.
CATL's global market share breaks 38% and its overseas market share is increasing rapidly. The global market share of CATL is above 35% in 2022, of which the global market share reached 38% in October and the overseas market share breaks 30%, with a rapidly increasing proportion of the overseas market. We expect that the company's global leading position will be solid and market share in Europe will increase to over 40% in the future with factory building in Germany and Hungary. There are still breakthroughs in the U.S. market through joint ventures. Though other markets such as Japan and South Korea are small, the company maintains to be their major supplier. We believe that in the long-term, CATL is expected to achieve a share of nearly 40% in the power battery sector.
CATL's shipments are expected to grow by 50% in 2023, keeping the upward momentum of earnings growth. We expect that the company's shipments will double to 300GWh in 2022 and further expand to 450GWh in 2023, with a YoY growth of 50%. In terms of profitability, CATL's metal price linkage has been fully implemented, successfully conducting the cost pressure. Adding the effects of the price reduction of midstream materials, CATL's unit earnings are expected to further improve in 2023.
Considering its layout of lithium and cobalt at the resource end, especially the release of effective lithium capacity next year, we expect its profitability to be further repaired.
Earnings Forecast & Rating: Considering the strong demand for the industry and the CATL's solid position as a global leader, we maintain our net profit forecast of RMB30.2/48.3/65.5 billion for 2022-2024. We maintain our 2022-2024 net profit forecast of $30.2/48.3/65.5billion, with a YoY growth of 90%/60%/36% and corresponding to a PE for 2022-2024 of 34x/21x/16x. Holding the company's rapid increase of overseas market share and rapid growth of energy storage next year, we give a PE of 36x and a target price of RMB712 in 2023, maintaining a "buy" rating.
Risks: Lower-than-expected sales.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。