CATL delivered a surprising report to the market. In the fourth quarter of 2025, the net profit attributable to shareholders reached 23.167 billion yuan, a year-on-year increase of 57.1% and a quarter-on-quarter growth of 25%, significantly surpassing the market expectation of approximately 19.6 billion yuan—marking the largest year-on-year increase in two and a half years. The annual net profit attributable to shareholders reached 72.2 billion yuan, a year-on-year increase of 42.28%, with profit growth significantly outpacing the 17% revenue growth.
After the earnings announcement, mainstream institutions such as HSBC Qianhai, Nomura, and Jefferies collectively raised their target prices and maintained buy ratings, with Wall Street's confidence in &#34;King Ning&#34; never being so unified.
The market's biggest concern prior—rising lithium prices eroding profits—has been largely dispelled by the management's earnings conference call. JP Morgan directly quoted management in its report stating: &#34;The unit net profit is expected to remain stable in 2026, with no significant changes under normal circumstances.&#34; CATL has established a hedging mechanism for lithium mines in the upstream, with contract pricing adopting a lithium carbonate linkage model, allowing cost increases to be smoothly passed on to customers, and being better prepared compared to the previous lithium price cycle. HSBC Qianhai also pointed out that the Yichun lithium mine project is accelerating the resumption of production approval, which, once approved, will further strengthen the company's cost hedging capability.
The capacity expansion story is the most noteworthy investment theme for 2026. The capacity utilization rate for the entire year of 2025 reached 97%, with the second half even reaching a historically rare 103%, indicating that the company lost some orders throughout the year due to capacity constraints. By the end of 2025, the capacity under construction reached 321 GWh. JP Morgan clearly stated that the scale of capacity under construction in 2026 is expected to further exceed the level at the end of 2025, and equipment suppliers have also confirmed that new equipment bidding activities have increased year-on-year. With the release of new capacity, the company is expected to regain orders that were previously lost due to capacity limitations.
<h2>Capacity Utilization Rate Hits Historical High, Order Overflow Becomes a Moat</h2>
CATL's capacity utilization rate in 2025 reached 97% (76% in 2024), with the second half operating at an exceptionally high load of 103%. Such a high utilization rate means that the company has actively given up some market share due to insufficient capacity—this is a &#34;happy trouble.&#34;
By the end of 2025, the company's effective capacity reached 772 GWh, with capacity under construction as high as 321 GWh. Management stated in the earnings conference call that capital expenditures will continue to grow in 2026, and the scale of &#34;capacity under construction&#34; may further exceed the 321 GWh level at the end of the year. Analysts at HSBC Qianhai have accordingly raised their shipment forecasts for 2026 to 2027, subsequently increasing their net profit forecasts for both years by 7% and introducing profit forecasts for 2028.
JP Morgan also pointed out that CATL lost some orders in 2025 due to capacity constraints, and with the ramp-up of new capacity in 2026, these orders are expected to be fully recovered.
<h2>Market Share: Full Counterattack, Europe Performs Most Impressively</h2>
CATL's global market share in the power battery market rose from 38% to 39% in 2025, while the global share of energy storage batteries remained stable at around 30%.
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What is more worth noting behind the data is the structural change: While the market share of domestic passenger cars is under pressure, the market share in Europe has significantly jumped from 37% in 2024 to 43% in 2025, becoming the core engine driving the global share increase.
In January 2026, the domestic power battery market share rebounded to 50%, reaching an 18-month high. HSBC Qianhai predicts that the shipment volume of energy storage batteries will increase by 65% year-on-year in 2026, expected to become the largest growth driver for the year. In terms of business structure, the increase in penetration rates of domestic commercial vehicles and European power batteries is expected to partially offset the impact of the slowdown in the growth of the domestic passenger car market, leading to a more balanced source of growth.
<h2>Lithium Price Increase: Market Panic Resolved by Management's Words</h2>
Since 2026, the spot price of lithium carbonate has increased by nearly 26%, while the price of lithium iron phosphate cathode materials has risen by about 16%, and the price increases of key materials such as electrolytes are even more significant.
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However, the management of CATL responded very calmly during the conference call:
<blockquote>
First, the company had already promoted upstream resource integration and hedging arrangements after the last round of raw material price increases, making this round of response more composed than the last;
Second, most cost increases can be passed on to customers through &#34;friendly negotiations,&#34; and the impact of export tax rebate reductions can also be handled similarly (the transmission was completed when the rebate was reduced from 13% to 9% in 2024);
Third, if lithium prices continue to rise sharply, the sodium-ion battery route will provide additional buffer, and Changan Automobile has planned to promote sodium-ion batteries across all its brands.
</blockquote>
The company also stated that the Yichun lithium mine project is accelerating its resumption of production, which will significantly enhance its cost hedging capability once approvals are completed.
<h2>Wall Street Upgrades, Valuation Still Has Considerable Space</h2>
After the earnings report was released, Wall Street collectively turned bullish on the company's future prospects:
<blockquote>
HSBC Qianhai: A-share target price of 467 yuan, current price of 357.50 yuan (as of March 9, 2026), implying about 31% upside; H-share target price of 648 Hong Kong dollars, current price of 503 Hong Kong dollars, implying about 29% upside.
JP Morgan: H-share target price of 640 Hong Kong dollars, based on a 29 times 2026 forecast P/E ratio, maintains an overweight rating. 4Q25 performance exceeded JP Morgan's forecast by about 20%, reiterating CATL as a top recommended stock.
Nomura Securities: A-share target price raised from 465 yuan to 476 yuan.
Jefferies: A-share target price raised to 522 yuan, with profit forecasts for 2026 to 2028 raised by 5% to 6%, emphasizing extremely high visibility for long-term growth.
</blockquote>
Institutions generally believe that sustained profit realization, market share expansion, and high capacity utilization in the second quarter of 2026 will be short-term catalysts for the company's stock price.

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CATL's net profit surged by 57% in the fourth quarter, with an annual profit of 72.2 billion; the capacity utilization rate reached a historical high of 103%, and its market share in Europe jumped from 37% to 43%. In the face of a market panic due to a 26% surge in lithium prices, management's statement of "maintaining stable unit net profit" completely dispelled doubts. Institutions such as HSBC and Nomura collectively raised their target prices, with the A-shares implying a maximum upside of 31%. The growth story of "Ning Wang" for 2026 has just begun

- Ningde Times reported significant financial results for Q4 2025, with a net profit of 23.167 billion yuan, exceeding market expectations and marking a 57.1% year-on-year increase.  
- The company has effectively addressed previous market concerns regarding rising lithium prices and is expected to maintain steady profits due to proactive resource management and cost transmission to customers.  
- Market analysts have collectively raised target prices for the company, reflecting confidence in its growth, particularly in the burgeoning European market where its share surged from 37% to 43%.

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CATL

Ning Wang's performance is stunning, Wall Street is collectively optimistic: the impact of rising lithium prices is limited, and production expansion is expected to accelerate this year