JPMorgan has released a research report maintaining its "Overweight" rating on CATL (03750) with a target price of HK$725.

The company's share price has fallen 17% cumulatively this month, underperforming the Hang Seng Index, which declined 2% over the same period. This weakness is mainly attributed to market concerns over supply fragmentation among OEM automakers, slowing demand, and intensifying competition.

The bank believes the market is overly focused on short-term movements in selling prices and market share. JPMorgan cited a NielsenIQ global new energy vehicle consumer survey conducted in September this year, which showed that CATL's trust levels reached 81% in China and 75% overseas, leading the second-ranked brand by 4 and 8 percentage points, respectively. 79% of respondents said that a recognized high-quality battery brand would increase their willingness to purchase, 76% were willing to pay a premium, and 37% of Chinese consumers said they would reconsider their purchase if their preferred model did not use a CATL battery.

The bank also noted that the quality of energy storage systems is becoming a driver of revenue and internal rate of return, rather than being purely a cost consideration. CATL's equipment price gap with peers is said to be generally less than 5% of total project costs.