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CATL Stock Falls 12% After Q3 Earnings Miss
Why did CATL stock fall 12%?
CATL (300750.SZ) stock fell 12% in Shenzhen on Wednesday, with Hong Kong shares closing at HK$364.80, after third-quarter profit grew just 14.5% against 41% expected, as a new battery tax hit margins.
Key numbers
| Q3 revenue | ¥165.2B+58.6% YoY |
|---|---|
| Q3 net profit | ¥21.2B+14.5% YoY vs 41.2% expected |
| Shenzhen shares, Oct 21 | -12.03%Hong Kong -11.41% |
| Gross margin | 20.69%2nd straight fall; Reuters cites 19.3% |
| Q3 taxes and surcharges | ¥2.21Bvs ¥0.597B a year earlier |
| JPMorgan HK price target | HK$500from HK$725 |
What happened
CATL (300750.SZ) stock fell 12% in Shenzhen on Wednesday, with Hong Kong shares closing at HK$364.80, after third-quarter profit grew just 14.5% against 41% expected, as a new battery tax hit margins. Sales jumped 58.6% to 165.2 billion yuan, but profit rose only to 21.2 billion yuan and fell 5.8% from the prior quarter. A 2% tax on batteries returned on September 1, export tax refunds shrank, and lower-profit energy-storage sales added pressure. JPMorgan downgraded the Hong Kong shares to neutral and cut its price target (its estimate of where the stock is headed) to HK$500 from HK$725.
Why it matters
CATL, the world's largest maker of electric-vehicle batteries, is selling much more but keeping less profit from each sale. New taxes, smaller export refunds and tougher rivals are squeezing it, and the battery tax doubles to 4% in September 2027. Because CATL supplies many carmakers, its profits are a gauge of the whole battery industry. Management still says global battery demand may grow 20% to 30% in 2027.
Who this affects
- MarketbearishMedium impact
- Chinese battery shareholders lost heavily; sector sentiment weakened.
- CompanybearishHigh impact
- CATL shareholders face a margin squeeze and rising taxes.
- CompetitorsmixedLow impact
- BYD has been gaining China market share from CATL.
- IndustrybearishMedium impact
- Tax changes squeeze Chinese battery makers' profits industry-wide.
CATL vs BYD
| CATL300750.SZ | 39.4% | 49.8% | 40.9% |
|---|---|---|---|
| BYD1211.HK | 15.1% | 17.4% | 21.1% |
As of 2026-10-20
How we got here
China cuts the export tax refund on batteries from 9% to 6%
A 2% consumption tax on lithium batteries returns in China
CATL reports Q3 profit up 14.5% and revenue up 58.6%
Shenzhen shares close down 12.03%; Hong Kong shares close down 11.41%
What to watch
- Talks with automakers on passing the new battery tax into pricesQ4 2026
- China scraps the export tax refund on batteries entirely2027-01-01
- Battery consumption tax doubles from 2% to 4%2027-09-01
Educational content only. Not investment advice.
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