Goldman Sachs forecasts 50% jump for battery giant CATL’s shares as energy storage takes off

Contemporary Amperex Technology Co Limited (CATL) will see 50 per cent growth in its share price to a record high over the next 12 months, as it benefits from rising demand for energy independence, according to Goldman Sachs.

The Wall Street investment bank expected CATL’s battery energy storage system business to be its next value-creation engine, though the market is viewing the business more for its potential to increase battery volumes.

“We see a strategic integration push that can lift margins, earnings quality, share and valuations, supported by a deepening moat vs Chinese battery peers built on years of cost, technology leadership, and ecosystem buildout,” said Goldman Sachs analysts Nick Zheng and Selina Yan in a note on Thursday.

“As front-loaded demand drives ESS cyclicality towards [2028] and performance gaps expose weaker suppliers, China’s fragmented [energy storage system] battery market is ripe for consolidation.”

Goldman put its 12-month target price for CATL’s Hong Kong stock at HK$946 and its Shenzhen shares at 566 yuan, implying a 51 per cent and 57 per cent rise, respectively.

As the world’s largest electric vehicle (EV) battery manufacturer, CATL was aiming to expand its dominance to the energy storage sector, with its shipments of energy storage-use batteries taking a 30 per cent market share globally last year, according to the South Korean consulting firm SNE Research.