---
endpoint: analytics
pattern: Energy
status: done
latency_ms: 209220
conversation_id: fa849b51-fe8c-49cc-85cb-e76dd02e359e
citations: 12
created: 2026-05-31 22:02:02Z
---

# How does CATL’s valuation compare to peers, and what justifies its premium/discount?

# CATL (300750 CH / 3750 HK) — Valuation vs Peers & What Justifies the Premium

> **CLSA is the sell-side anchor here** (Sanjeev Rana et al., CLSA-parent coverage — not CLST). Latest internal note is dated **10-June-2025**; ratings are **High-Conviction Outperform** on both CATL-A and CATL-H. TPs: **Rmb380** (A) and **HK$447** (H). All peer benchmarks are priced as of 19-May-2025 [1].

---

## 1. The Peer Comp Table — CATL vs Global Battery Manufacturers

Per CLSA's full peer table dated 19-May-2025 (Figure in "A new era") [1]:

| Company | Ticker | Mkt Cap (US$bn) | 25 PE | **26 PE** | 25 EV/EBITDA | **26 EV/EBITDA** | 25 PB | 25 ROE (%) | Div Yld (%) |
|---|---|---|---|---|---|---|---|---|---|
| **CATL-A** | 300750 CH | 158.7 | 17.7 | **14.6** | 9.7 | **7.6** | **3.9** | **23.0** | 2.4 |
| BYD-H | 1211 HK | 164.2 | 21.9 | 18.2 | 8.1 | 6.5 | 4.9 | 24.3 | 1.3 |
| BYD-A | 002594 CH | 164.2 | 20.8 | 17.0 | 8.0 | 6.2 | 4.7 | 24.2 | 1.3 |
| EVE Energy | 300014 CH | 12.9 | 17.3 | 13.3 | 12.4 | 9.5 | 2.2 | 12.9 | 1.3 |
| Gotion High-Tech | 002074 CH | 5.8 | 29.5 | 21.5 | 14.8 | 12.6 | 1.5 | 5.2 | 0.8 |
| Sunwoda | 300207 CH | 5.0 | 16.1 | 13.1 | 10.0 | 8.5 | 1.4 | 8.6 | 1.3 |
| CALB | 3931 HK | 3.9 | 17.9 | 12.7 | n/a | n/a | 0.8 | 3.8 | 0.1 |
| **LG Energy Solutions** | 373220 KS | 49.1 | 240.9 | **54.4** | 17.1 | **12.0** | 3.1 | 1.7 | 0.0 |
| **Samsung SDI** | 006400 KS | 8.7 | 41.7 | 10.4 | 10.4 | 6.7 | 0.6 | 1.6 | 0.6 |
| **Panasonic** | 6752 JP | 27.3 | 11.7 | 10.7 | 5.6 | 5.3 | 0.8 | 6.9 | 2.5 |
| **Battery-mfg avg** | – | – | 46.4 | **19.0** | 10.8 | **8.4** | 2.2 | 9.9 | 1.0 |
| Tianqi Lithium-H | 9696 HK | 6.5 | 22.6 | 14.8 | 15.7 | 9.7 | 0.8 | 3.8 | 1.4 |
| Ganfeng Lithium-H | 1772 HK | 7.9 | 43.2 | 16.3 | 24.1 | 15.7 | 0.8 | 1.8 | 0.4 |
| **Materials/resources avg** | – | – | 46.9 | **20.5** | 20.9 | **13.8** | 1.2 | 3.5 | 0.7 |

Source: CLSA, Bloomberg [1].

### The key reads from this table

- **On 26CL PE, CATL-A is the CHEAPEST China/global battery name** at **14.6x** vs a peer-average **19.0x** — roughly **23% discount** to the peer mean on forward earnings.
- **On 26CL EV/EBITDA, CATL-A trades at 7.6x vs peer-avg 8.4x** — a ~10% discount despite being the global #1.
- **CATL prints the highest ROE in the cohort** — **23–23.5%** in 25–26CL, vs LG Energy 1.7%/5.8%, Samsung SDI 1.6%/5.6%, and only BYD comes close (~24%) [1].
- **Korean peers (LG Energy, Samsung SDI) are statistical outliers** — high headline PEs reflect crushed near-term profitability, not premium valuation. PB tells the truer story: LGES 3.1x, Samsung SDI 0.6x, Panasonic 0.8x vs **CATL-A 3.9x** [1].
- **BYD-H/A is the only comparable that trades richer than CATL-A** on PE (18.2x vs 14.6x 26CL), and roughly in line on EV/EBITDA — but BYD is a vehicle OEM with battery vertical integration, not a pure-play cell maker.

**Net: on the headline multiples shown above, CATL-A actually trades at a DISCOUNT to its peer group on PE/EV-EBITDA — the only "premium" sits in PB (3.9x vs 2.2x average), which is rational given ROE delta (23% vs 10%).**

---

## 2. Where the "Premium" Conversation Actually Lives — Two Distinct Premia

### Premium A — Segment-level, embedded in CLSA's SOTP target multiples

CLSA's Rmb380 SOTP target price for CATL-A applies **explicit valuation premia by segment** [6]:

| Segment | 26CL EBITDA (Rmb bn) | CLSA Target Multiple | Peer-comp benchmark | **Premium vs Peers** |
|---|---|---|---|---|
| EV batteries | 74.3 | **12.0x EV/EBITDA** | 8.0x (global battery mfg) | **+50%** [2] |
| ESS batteries | 31.0 | **12.0x EV/EBITDA** | 8.0x (global battery mfg) | **+50%** [2] |
| Battery materials & resources | 10.4 | 10.0x EV/EBITDA | 14.0x (Tianqi/Ganfeng) | **–30% discount** [2] |
| Others (non-core) | 12.2 | 5.0x EV/EBITDA | n/a | (housekeeping) [2] |

→ CLSA explicitly justifies the **+50% premium** on EV batteries by citing CATL's **#1 global market position, market-leading scale, and robust margin trend** [2].
→ Same +50% premium on ESS batteries — same logic plus **higher-than-peers ESS margin** [2].
→ The materials & resources segment gets a **–30% discount** to Tianqi/Ganfeng because **CATL's scale and unit profitability in that vertical is materially smaller** than the pure-play lithium peers [2].
→ At the Rmb380 target, the implied multiples are **21x 26CL PE and 13.8x 26CL EV/EBITDA** [6][10].

### Premium B — The A/H share premium ("a new normal")

Following CATL's 20-May-2025 HK secondary listing:

- **CATL-H has traded at a sustained +12% premium to CATL-A** since listing (12.9% as of 10-June close) — something the HK/China dual-listed market had not seen for a non-BYD name since 2014 [7][8].
- The Hang Seng Stock Connect China A-H Premium Index implies the average dual-listed name still trades at a **~25% H-discount** (34% A-premium) — CATL is the polar opposite [8].
- **BYD is the precedent** — its H discount narrowed from –9% avg (2024) to **+3% premium** by May 2025 [5][8].
- CLSA's TP build now **bakes in a 10% H-share premium** (raised from a –5% discount), driving the CATL-H TP to HK$447 from HK$385 [9][12].

---

## 3. What Specifically Justifies the Premium Multiples

CLSA's argument is built on four pillars, each with internal-research support:

1. **Dominant market share / scale moat.** CATL is the **global #1 in both EV batteries and ESS batteries** [2]. The 50% premium-to-peer EV/EBITDA multiple is anchored explicitly on this position [2].
2. **Premium-EV mix advantage.** CATL holds **72% market share in China's premium-EV battery segment**, which yields **better ASP and higher margins** than the mass-market segment — important given CLSA's China auto team forecasts EV sales slowing to a **10% CAGR through 2030** (i.e., mix matters more than volume going forward) (607961671 summary).
3. **Margin durability and earnings growth.** CLSA's 25-27CL EPS CAGR is **~20% pa** (Rmb15.18 → Rmb18.20 → Rmb21.69), with **ROE sustained 23-25%** and **deepening net cash** (Rmb87.75/share by 27CL) [10]. Headline 14.7x/17.7x 26CL PE on CATL-A/H is **"undemanding relative to its earnings growth potential"** in CLSA's words [8].
4. **Re-rating to historical norm.** CATL traded at **20x avg forward PE during the 2022-to-current normalised growth period, with a 12x trough**. The current 14x 26CL PE sits near the trough — implying the market is "pricing in a more pessimistic outlook" and a re-rating to 20x is justified given European EV battery expansion, ESS leadership, and tariff pass-through power [3][4].

---

## 4. Why the H-Premium May Sustain (Premium B Rationale)

- **Index inclusion / global passive demand** post HK listing — the most directly comparable A-H name (BYD) has already moved from discount to premium under similar dynamics [5][8].
- **Higher offshore-investor accessibility** vs Shenzhen-only A-share, with a deeper southbound bid building from mainland funds [7].
- **Pricing power for tariffs.** CLSA argues the market has overestimated US tariff impact — CATL "will be able to pass on some of the burden to its customers given its dominant market position and pricing power", which removes a near-term overhang and supports rerating [4].

---

## 5. The Bear Case / Where the "Premium" Could Compress

- **EV battery industry growth deceleration.** China EV CAGR slowing to 10% through 2030 compresses the addressable volume runway, even if mix shifts premium.
- **Tariff resolution risk.** The 90-day US tariff extension is unresolved; if pass-through proves harder than CLSA expects, near-term earnings get hit and the premium-vs-peers narrative weakens [4].
- **A/H premium mean reversion.** A +12% H-premium is historically anomalous for a non-BYD name; if HK listing optimism fades to a more typical mid-single-digit discount, CATL-H sees ~10-15% relative drawdown vs A [7].
- **Battery materials discount could widen.** CLSA already prices CATL's materials/resources segment at a 30% discount to Tianqi/Ganfeng; further competitive intensity in upstream could justify a deeper haircut [2].

---

## 6. Bottom Line

- **On headline multiples (PE, EV/EBITDA, Div Yield), CATL-A does NOT trade at a premium to its battery-mfg peer group on FY26** — it trades at a ~23% PE discount and ~10% EV/EBITDA discount [1].
- **The only multiple where CATL is clearly a premium name is PB (3.9x vs 2.2x peer-avg)**, and this is fundamentally justified by ROE of 23% vs 10% peer-avg — i.e., it is a quality, not multiple-expansion, premium [1].
- **The "premium" debate is sharper at two layers**: (i) inside CLSA's SOTP, where each operating segment carries a +50% multiple premium vs global battery peers, explicitly anchored on #1 share, scale and margin leadership [2]; (ii) at the A/H share level, where CATL-H carries a +12% premium to CATL-A — a market anomaly that CLSA argues is the new normal given BYD's parallel A/H convergence [5][7][9].
- **What justifies it**: dominant global market share in EV and ESS, the highest ROE in the cohort, premium-EV mix lift, and a 20% earnings CAGR trajectory through 27CL that makes the current PE look closer to a cyclical trough (~12x) than a structural high (~20x avg since 2022) [3][4][10].

---

**Sources**
[1] CATL — A new era (Figure 14: Valuation comps – CATL vs battery mfg peers, priced 19-May-2025) — CLSA, 20-May-2025 — 607959766LinqAlpha.PDF
[2] CATL — A new era (SOTP segment build & segment-level premium thesis) — CLSA, 20-May-2025 — 607959766LinqAlpha.PDF
[3] CATL — A new era (14x 26CL PE vs 20x historical avg / 12x trough) — CLSA, 20-May-2025 — 607959766LinqAlpha.PDF
[4] CATL — A new era (Tariff pass-through; rerating thesis) — CLSA, 20-May-2025 — 607959766LinqAlpha.PDF
[5] CATL — A new normal? (BYD H-A premium time-series table) — CLSA, 25-May-2025 — 607960433LinqAlpha.PDF
[6] CATL — A new normal? (SOTP TP table — Rmb380 A / HK$385 H) — CLSA, 25-May-2025 — 607960433LinqAlpha.PDF
[7] CATL (Green shoots) (CATL-H premium to CATL-A daily series, 20-May to 10-Jun-2025) — CLSA, 10-June-2025 — 607961671LinqAlpha.PDF
[8] CATL — A new normal? (11% H-premium summary + 14.7x/17.7x 26CL PE thesis) — CLSA, 25-May-2025 — 607960433LinqAlpha.PDF
[9] CATL (Green shoots) (10% H-premium thesis & TP raise to HK$447) — CLSA, 10-June-2025 — 607961671LinqAlpha.PDF
[10] CATL — A new normal? (financials snapshot: 23A-27CL revenue, EPS, PE/EV-Ebitda/PB/ROE) — CLSA, 25-May-2025 — 607960433LinqAlpha.PDF
[11] CATL — A new era (Figure: SOTP TP build — old Rmb380 derivation) — CLSA, 20-May-2025 — 607959766LinqAlpha.PDF
[12] CATL (Green shoots) (10% H-premium thesis, TP HK$447 build) — CLSA, 10-June-2025 — 607961671LinqAlpha.PDF

## Citations

- [1] **607959766LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959766LinqAlpha.PDF>
- [2] **607959766LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959766LinqAlpha.PDF>
- [3] **607959766LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959766LinqAlpha.PDF>
- [4] **607959766LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959766LinqAlpha.PDF>
- [5] **607960433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607960433LinqAlpha.PDF>
- [6] **607960433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607960433LinqAlpha.PDF>
- [7] **607961671LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961671LinqAlpha.PDF>
- [8] **607960433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607960433LinqAlpha.PDF>
- [9] **607961671LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961671LinqAlpha.PDF>
- [10] **607960433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607960433LinqAlpha.PDF>
- [11] **607959766LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959766LinqAlpha.PDF>
- [12] **607961671LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961671LinqAlpha.PDF>

