CLSA has released a research report stating that the firm held its annual investor forum last week, during which the stock most discussed by investors was CATL (03750). Some attendees were bullish on the company's long-term development trajectory, believing it can overcome short-term challenges and maintain its dominant position, and are willing to endure short-term volatility; while bears argued that the company's earnings and share price still have greater downside potential. CLSA maintains its "High Conviction Outperform" rating on CATL, with a target price of HK$770.

The firm noted that investors believe the decline in CATL's gross margin in the first half of this year should be temporary, and expect that as lithium prices fall, gross margin will stabilize in the second half; the commencement of sodium-ion battery production will also help alleviate some raw material cost pressures starting from 2027. On the bearish side, there is pessimism about energy storage demand in 2027, with the most pessimistic forecast suggesting that China's energy storage demand could decline year-on-year on an annual basis in 2027; bears also view recent moves by electric vehicle manufacturers to diversify supply and reduce reliance on CATL as a potential signal of market share loss, and believe that amid intensifying competition, the company may be forced to engage in price cuts to defend its market share, potentially leading to a structural decline in gross margin.

CLSA currently leans bullish, believing that the current setback is only temporary.