Chinese parts suppliers ride Tesla-powered electric-car boom as top battery maker surpasses Bank of China, Midea, PetroChina in size
- Contemporary Amperex has returned 424 per cent over the past 12 months, making it the eighth largest listed company in China by market value
- Others in the Tesla ecosystem have seen less than stellar performances amid concerns about margins, analysts say
The electric-car boom has catapulted Contemporary Amperex Technology Limited (CATL) into China’s eighth largest stock by market value at 942.3 billion yuan (US$145.5 billion), according to Bloomberg data, surpassing Bank of China, appliances maker Midea and PetroChina.
The electric-car battery maker has returned 424 per cent over the past 12 months, while the CSI 300 index of the biggest companies on the Shanghai and Shenzhen exchanges gained 88 per cent. On average, 144 mainland-listed car-component makers in Tesla’s ecosystem rose about 39 per cent over the same period, according to an index created by consultancy East Money Information.
A stronger conviction may be needed to repeat or surpass that performance, as electric-car makers start ramping up production and deliveries to meet pent-up demand while margins come under pressure, according to Ding Haifeng, a consultant with Shanghai-based financial advisory firm Integrity.
“The car component suppliers may benefit from a jump in deliveries of Tesla and other electric cars,” said Ding. “Their earnings outlook appears to be better in 2021, but they need to prove it. Investors have not been convinced yet.”