A three-month slide in Contemporary Amperex Technology Ltd, a major Tesla supplier, has knocked its market value below 1 trillion yuan (US$156.3 billion) for the first time in about a year. Part of that is because of Covid-19 production hiccups. The stock slumped 7.6 per cent to 407 yuan in Shenzhen on Wednesday, capping a 31 per cent or US$63 billion rout this year and valuing the electric-vehicle (EV) battery maker at 949 billion yuan. Its capitalisation has held up above the trillion-yuan level since May 31, according to Bloomberg data. The setback mirrors the fallout in China’s stock market, with the Shanghai Composite Index ranking as the worst performer among major Asia-Pacific equity benchmarks. Policymakers in Beijing have disappointed investors this month by withholding their stimulus firepower. Partial and citywide lockdowns across more than 50 municipalities and provinces, including major commercial and technology hubs in Shanghai, Shenzhen and Zhengzhou, have affected CATL facilities, and could leave the auto industry at a standstill , according to EV maker Xpeng, a CATL customer. “Shipments would be a major issue for CATL now because of supply-chain disruptions nationwide,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “Investors keep asking whether its profit margins will be eroded, with higher material costs and difficulty in shipments.” Coronavirus: Shanghai’s daily new Covid-19 cases dip below 20,000 for the first time in 13 days as weeklong standstill order end s The decline has soured investor sentiment around so-called clean-energy stocks, from EV battery makers to carmakers and renewable-energy producers, which enjoyed a meteoric boom before and after China pledged its 2030 peak-emissions and 2060 net-zero target. The stock pullback this year has also become the biggest drag on the ChiNext index of growth companies on the Shenzhen exchange. Within the CSI 300 Index, nine of the 10 industry groups have been losers this year, the exception being energy producers. Higher bond yields, stroked by global inflation and the Federal Reserve tightening, are also fanning the sell-off in super-expensive stocks in favour of safer traditional bets. Brace for earnings fallout as Covid lockdowns cause production shocks Even after this year’s US$63 billion rout, the EV battery maker still trades at 96 times earnings, or six times the market average, according to Bloomberg data. At its peak, the multiple reached 170 times, propelling its market capitalisation to behind only liquor king Kweichow Mao-tai. “The best way is to avoid such richly-valued stocks” Dai Ming at Huichen added. CATL is due to release its first-quarter results next week. Net income probably jumped between 151 per cent and 196 per cent from a year earlier, the company said in an exchange filing in January.