CATL profit jump fuels Hong Kong battery stocks amid global energy storage boom

Betting on rising global demand for energy storage, shares of Chinese lithium battery makers continued to rally on Wednesday, led by Contemporary Amperex Technology Ltd (CATL), which reported stronger-than-expected growth driven in part by its expansion into new energy storage markets. CATL shares surged more than 10 per cent to HK$608 during morning trading hours in Hong Kong on Wednesday – the highest level in five months – before closing 9 per cent higher at HK$599.50. That followed another 9 per cent increase on Tuesday. Earlier this week, the battery giant reported a 42 per cent growth in net profit to 72.2 billion yuan (US$10.5 billion), with its smaller energy storage segment delivering higher margins than its dominant electric vehicle (EV) battery business. CATL topped global energy storage battery shipments for the fifth consecutive year in 2025, according to Seoul-based consultancy SNE Research. Speaking at the Battery Show Asia 2026 in Hong Kong on Tuesday, CATL general counsel John H. Kwon said the company’s EV and energy storage battery businesses currently accounted for 80 per cent and 20 per cent of its operations, respectively. He said he expected the ratio to move towards 50:50 in the coming years, with energy storage potentially surpassing EV batteries over the long term. Demand for energy storage has been growing worldwide as countries accelerate deployment of intermittent renewables like solar and wind. Explosive growth in data centres, fuelled by artificial intelligence, cloud computing and digitalisation, is also driving demand. Global energy storage installations were forecast to grow by more than 60 per cent in 2026, with a compound annual growth rate of 30 to 50 per cent between 2027 and 2029, according to a report from Soochow Securities. CATL’s strong performance, despite higher raw material costs – especially lithium prices – in the fourth quarter last year had encouraged investors, according to Kenny Ng Lai-yin, a strategist at Everbright Securities International. The company was in a leading position in the lithium battery sector “so when its shares rise, it is likely to lift the whole sector”, Ng added. On Wednesday, Beijing-based Tsaker New Energy Tech, which manufactures fine chemicals for lithium-ion battery materials, jumped more than 8 per cent to HK$0.92, its highest in a month, before closing flat at HK$0.85. China Aviation Lithium Battery surged over 11 per cent to HK$29.82, its highest since January, before closing more than 8 per cent higher at HK$29.14. Stocks in the sector listed on mainland China’s exchanges also rallied, with Chint Group, a smart energy solution provider, climbing 10 per cent to close at 29.68 yuan.