Company Coverage
Contemporary Amperex Technology Co (300750 CH): 3Q26: Earnings Miss Due To Delayed Pass-through Of Tax Hikes
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb227.90
Rmb470.00
106.2%
Rmb585.00
Analyst
Highlights
- 3Q26 net profit missed expectations at Rmb21.25b (+14.5% yoy/-5.8% qoq), as CATL bore the export VAT hikes and 2% consumption tax, and had not passed on to customers yet.
- We expect margins to recover in 3Q26, as the tax rate hikes will be partly passed through to customers via higher battery prices. Having said that, the further roll-back of tax concession in 2027 will remain a drag on margins.
- We cut our 2026-28 net profit forecasts by 5%/10%/16% to Rmb89,121m/Rmb104,895m/Rmb116,370m respectively, as we now expect CATL to bear part of the tax hikes.
- Maintain BUY and cut target price from Rmb585.00 to Rmb470.00.
Analysis
- 3Q26 results came in below estimates with GAAP net profit of Rmb21,246m (+14.5% yoy/-5.8% qoq) and adjusted net profit of Rmb18,862m (+14.9% yoy/-9.8% qoq), vs our estimate of Rmb23.92b. This brings 9M26 net profit and adjusted net profit to Rmb64,530m (+31.6% yoy) and Rmb57,876m (+32.7% yoy) respectively, representing 69% of our full-year estimates of Rmb93,637m (+29.7% yoy) and Rmb83,659m (+29.7% yoy). The earnings miss stemmed from margin contraction.
- Battery shipment grew 44.4% yoy and 12.1% qoq to Rmb260 GWh in 3Q26, in line with estimates, including 195 GWh EV battery (+35.4% yoy/+12.1% qoq) and 65 GWh energy storage system (ESS) battery (+80.6% yoy/+12.1% qoq).
- Battery shipment grew 44.4% yoy and 12.1% qoq to Rmb260 GWh in 3Q26, in line with estimates, including 195 GWh EV battery (+35.4% yoy/+12.1% qoq) and 65 GWh energy storage system (ESS) battery (+80.6% yoy/+12.1% qoq).
Highlights
- 3Q26 net profit missed expectations at Rmb21.25b (+14.5% yoy/-5.8% qoq), as CATL bore the export VAT hikes and 2% consumption tax, and had not passed on to customers yet.
- We expect margins to recover in 3Q26, as the tax rate hikes will be partly passed through to customers via higher battery prices. Having said that, the further roll-back of tax concession in 2027 will remain a drag on margins.
- We cut our 2026-28 net profit forecasts by 5%/10%/16% to Rmb89,121m/Rmb104,895m/Rmb116,370m respectively, as we now expect CATL to bear part of the tax hikes.
- Maintain BUY and cut target price from Rmb585.00 to Rmb470.00.
Analysis
- 3Q26 results came in below estimates with GAAP net profit of Rmb21,246m (+14.5% yoy/-5.8% qoq) and adjusted net profit of Rmb18,862m (+14.9% yoy/-9.8% qoq), vs our estimate of Rmb23.92b. This brings 9M26 net profit and adjusted net profit to Rmb64,530m (+31.6% yoy) and Rmb57,876m (+32.7% yoy) respectively, representing 69% of our full-year estimates of Rmb93,637m (+29.7% yoy) and Rmb83,659m (+29.7% yoy). The earnings miss stemmed from margin contraction.
- Battery shipment grew 44.4% yoy and 12.1% qoq to Rmb260 GWh in 3Q26, in line with estimates, including 195 GWh EV battery (+35.4% yoy/+12.1% qoq) and 65 GWh energy storage system (ESS) battery (+80.6% yoy/+12.1% qoq).
- Battery shipment grew 44.4% yoy and 12.1% qoq to Rmb260 GWh in 3Q26, in line with estimates, including 195 GWh EV battery (+35.4% yoy/+12.1% qoq) and 65 GWh energy storage system (ESS) battery (+80.6% yoy/+12.1% qoq).
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb227.90
Rmb470.00
106.2%
Rmb585.00
Analyst
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