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(Bloomberg) — Contemporary Amperex Technology Co. Ltd.’s shares surged as a prominent analyst upgrade and expectations for stronger demand for its energy storage system business fueled bullish bets on the battery maker.
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Its Hong Kong-listed stock climbed as much as 10% Monday, putting it on track for the highest close since listing in May, after JPMorgan Chase & Co. upgraded the firm to overweight on its strong earnings prospects. In Shenzhen, CATL jumped as much as 14% on optimism about China’s push for new large-scale energy storage projects.
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Chinese battery stocks have staged a rebound in recent weeks, fueled by investor enthusiasm over export order demand for energy storage systems and progress in solid-state battery developments. On Friday, authorities unveiled a special action plan to boost the energy storage industry through 2027, which is expected to drive around 250 billion yuan ($35 billion) in investments.
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Given the better-than-expected demand from energy storage system and production plans in the third quarter, JPMorgan raised its earnings estimates for 2025-2026 by roughly 10% to a Street high, analysts including Rebecca Wen wrote in a note dated Sept. 14. CATL’s mainland China-traded shares are now the cheapest battery stock globally, they wrote.
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A government-led world energy storage conference set to be held later this week in Ningde, Fujian, where CATL is headquartered, is also putting renewed focus on its stock.
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Other renewable energy shares gained alongside CATL, with Hunan Yuneng New Energy Battery Material Co., Sungrow Power Supply Co. and Eve Energy Co. all surging on Monday.
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CATL is the world’s biggest maker of electric-vehicle batteries and supplies major brands including Tesla Inc. and BMW AG. The Chinese firm held 37.5% of the market in the first seven months of this year, more than double BYD Co., which largely makes batteries for its own cars, according to SNE Research.
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CATL has been able to better weather uncertainties in the Chinese EV market, which is the focus on a crackdown by officials seeking to stamp out a brutal price war that’s battered the industry. That’s hurt the outlook for BYD — whose aggressive price discounting has put it front and center of Beijing’s attentions — and lifted the likes of CATL customers Geely Automobile Holdings Ltd. and Zhejiang Leapmotor Technology Co.
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The battery maker’s most recent earnings saw a 34% jump in second quarter net income, a new all-time high. BYD posted a shock profit slump in the same period.
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—With assistance from Danny Lee.
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(Updates details throughout.)
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