The price gap between Contemporary Amperex Technology Co.’s Hong Kong and Shenzhen shares has narrowed ahead of its Q3 earnings release.
After adjusting for currency, the Hong Kong shares now trade at a 30% premium to the mainland listing, down from 44% in July.
CATL, a major China-based battery maker, is set to announce its Q3 results later today.
Morgan Stanley expects Q3 battery sales volume to rise over 15% from the previous quarter, with net profit projected at 18.8 billion yuan (US$2.6 billion).
Investor caution has increased amid renewed trade tensions after share price highs earlier in October.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
CATL earnings need regional and segment detail
- Amid trade tensions and an expected 15%+ quarter-on-quarter volume uptick, CATL earned 110.34 billion yuan abroad in 2024, or 30.48% of sales, down from 32.67% in 2023 1. That mix implies concentration risk looks overstated.
- Power battery systems (primarily EV battery packs sold to automakers) produced 69.90% of 2024 revenue at 253.04 billion yuan, while energy storage was 15.83% 1. Gross margin was 15.04% in Q4 2024, down from 31.17% in Q3 2024 1. Compare profits with year over year care, and watch whether Q3 2025 faces similar pressure 1.
US Foreign Entity of Concern (FEOC) timelines in 2025 and 2026 create a rush for traceability vendors
- FEOC rules can withhold tax credits if US power or storage projects receive too much material help from prohibited foreign entities (PFEs) 2. Starts in 2026 face sourcing floors by cost that rise over time, set at 40% for power, 55% for storage in 2026, then 60% and 75% after 2029 2. Projects under construction by the end of 2025 avoid some new limits, which pulls demand forward 3.
- US Treasury Department plus Internal Revenue Service will issue safe harbor tables (simplified lookup tables) with related FEOC guidance by December 31, 2026 4. Battery makers seeking Section 45X (a US tax credit for domestically produced clean energy components) face sourcing limits under the PFE plus FEOC framework, which lifts demand for real time provenance tracking 24. More tables and guidance arrive by late 2026 4. That creates a near term opening for traceability vendors (software and data providers that verify the origin and custody of materials and components) 24.
Recent CATL developments
