Green stocks such as BYD and CATL are red hot again, as Chinese stocks flirt with bull market
- Tesla supplier CATL has rebounded 47 per cent from a slump in May, while EV makers have recouped nearly all their losses from Shanghai’s lockdown
- EV makers are among green energy stocks offering the highest earnings visibility, Fidelity’s Victoria Mio says
This is evident from a 47 per cent surge in Contemporary Amperex Technology (CATL) – the world’s biggest maker of lithium-ion batteries for electric vehicles and a Tesla supplier – since the company suffered a rout in May. BYD reached 1 trillion yuan (US$149.2 billion) in market value for the first time last month, while peers such as Nio and XPeng have risen by at least 30 per cent over the past two months.
Longi Green Energy Technology and Ningbo Orient Wires and Cables, two leading players in the photovoltaic and windpower sectors, have almost recouped all their market losses from the two-month Shanghai lockdown.
The 20 per cent recovery in Chinese stocks since the low on April 26 is providing comfort to domestic and global money managers. Policy easing in China has created a haven for funds whipsawed by inflation and the most aggressive rate increases in decades in major economies elsewhere.
“There are a lot of policy tailwinds for the new-energy industry, such as subsidies for EV purchases and windpower generation in rural areas,” said Zhan Yunming, an analyst at Hualong Securities based in Beijing. “All these policies will foster fast and sustainable growth in the green energy sector.”