CATL's Hong Kong shares soar 35% as energy storage fuels record profits

Contemporary Amperex Technology Co. Limited (CATL.L) has seen its Hong Kong-listed shares surge by 35% after reporting stronger-than-expected earnings. The rally comes as investors increasingly back the company's energy storage division, which now makes up 15% of its total revenue. A record 46% premium between its Hong Kong and mainland shares signals growing foreign confidence in its global expansion.

CATL.L's annual net profits climbed 42% to 72.2 billion yuan, beating market forecasts. The jump was driven largely by its energy storage business, where unit sales rose 29% year-over-year. This segment has become a key margin booster, with executives suggesting it could one day match revenue from electric vehicle (EV) batteries.

The company's market capitalisation, however, has faced sharp declines since early 2024. From around 450 billion USD at the start of that year, it fell to roughly 180 billion USD by March 2026—a drop of over 60%. Factors behind the decline included a global slowdown in EV demand, aggressive price wars in China, US trade restrictions on Chinese battery makers, and falling lithium and cobalt prices.

Despite these challenges, investor interest in CATL.L has rebounded. Rising oil prices and energy market instability have shifted focus toward alternative solutions, positioning the firm as a leader in energy diversification. The widening gap between its Hong Kong and mainland shares—now at a historic high—reflects offshore investors' optimism about its long-term growth.

CATL.L's strong earnings and energy storage growth have lifted its Hong Kong shares by 35%, far outpacing its mainland performance. The record premium between the two listings underscores foreign investors' belief in the company's ability to expand beyond EVs. With energy storage revenue rising and margins improving, the business appears set to play a larger role in global energy markets.