Macquarie: Raises target price of Contemporary Amperex Technology (03750) to 700 Hong Kong dollars with a rating of "outperform" compared to the market.

Morgan Stanley released a research report stating that the target price of Contemporary Amperex Technology (03750) has been raised from HK$680 to HK$700, reiterating an "outperform" rating. The bank pointed out that although the softening of domestic electric vehicle demand has dampened sentiment, Contemporary Amperex Technology can offset the impact by increasing the installation volume of single-vehicle batteries and passing on costs. Although the bank has lowered its profit forecast for the 2026 fiscal year by 9%, it has rolled the valuation benchmark to 20 times earnings per share for the 2027 fiscal year and increased the H-share premium from 20% to 25% considering the stock supply and demand situation. Contemporary Amperex Technology is set to announce its second-quarter results for 2026 after the close on Friday (24th). Due to the slowdown in demand for battery electric vehicles (BEV) and drastic fluctuations in raw material costs, it is expected that second-quarter profits will face short-term pressure. The bank predicts that its second-quarter delivery volume will remain flat quarter-on-quarter at 202GWh, 9% lower than market consensus; revenue is expected to be RMB 139.1 billion, below market expectations by 6%; Gross margin is also under pressure from the weakening demand for ternary lithium batteries and intensifying competition in energy storage systems.