Latest news with #EugeneHsiao
CNBC
4 days ago
- Automotive
- CNBC
Tesla supplier CATL has potential beyond just batteries, analysts say
For Tesla supplier Contemporary Amperex Technology , selling battery packs to major electric companies is just the start of its ambitions. "We believe the company is not just a hardware manufacturer, but it will also be a software ecosystem provider," Morgan Stanley analysts led by Jack Lu said in a report Wednesday. They pointed to CATL's artificial intelligence-powered tools for monitoring batteries on the road and giving early safety warnings. "As AI develops, the ecosystem will likely further evolve and provide more value added soft services to customers," the Morgan Stanley analysts said, noting that improved safety will also strengthen CATL's business partnerships and competitiveness. Morgan Stanley raised its price target on CATL's Hong Kong-listed shares to 445 Hong Kong dollars ($56.69), up 14% from 390 HKD previously. The new price target is nearly 18% above where CATL closed Friday, after reaching an intraday high of 395 HKD on Thursday. That was the highest since CATL shares listed in Hong Kong on May 20 in the world's biggest IPO of 2025. The company's mainland-listed shares have traded at an abnormally large discount to the Hong Kong shares. CATL also looks to be a step closer to generating revenue from licensing. Ford agreement U.S. automaker Ford has planned to open a battery factory through a licensing agreement with CATL. But the deal came under intense U.S. scrutiny , while there were concerns that Ford would lose advanced manufacturing tax credits. But Ford in the last week said it expects its BlueOval Battery Park in Michigan will benefit from such tax credits, and " remains on track to begin production of lithium iron phosphate (LFP) batteries in 2026." While the release did not mention CATL, analysts were hopeful. "This recent news is positive in that it appears there is tacit acceptance of the licensing arrangement," Macquarie analysts Eugene Hsiao and Fergus Kwan said in a report Wednesday, noting the development "helps to remove one key headwind on the shares." Neither CATL nor Ford immediately responded to a CNBC request for comment. CATL could receive 1.3 billion yuan ($181 million) in annual licensing fees if BlueOval operates near full capacity by 2027, although the battery company's profits won't likely benefit until then, the Macquarie analysts said. They have a price target of 360 HKD on CATL shares. U.S. scrutiny But CATL remains under broader scrutiny in the U.S. Earlier this year, the Pentagon added CATL to a "Chinese military" list that prohibits the U.S. Department of Defense from buying the company's products starting in 2026. CATL at the time said the designation was "a mistake" and that it "is not engaged in any military-related activities." "We believe geopolitical risk between China and the U.S. is already priced into the shares," the Macquarie analysts said. "Strong earnings fundamentals from market share gains in Europe, coinciding with increased shareholder returns, should lead to a valuation re-rating." CATL has pledged 90% of the funds raised by going public would support its expansion into Europe , especially a factory in Hungary that's nearing completion. The company last month also said a subsidiary has reached a deal in Indonesia for a $6 billion project that aims to cover nickel mining and processing, battery production and battery recycling. "We maintain our Buy rating for CATL," Bank of America analysts led by Ming Hsun Lee said in a July 2 report, "given its industry-leading battery technology and new product strategy to protect its market share, as well as its edge in technology and scale to drive more room for cost savings and sustained high" gross profit margins. The analysts have a 400 HKD price target on the stock. They highlighted that, in CATL's main line of business, Xiaomi will use the CATL's battery in its popular YU7 SUV, "which should be positive to CATL's [market] share in China." CATL has also built business partnerships in new technologies around battery swapping and packs designed specifically for hybrid-powered cars . Geely -backed electric car company Zeekr on Wednesday announced its hybrid driving system is based on CATL's "Freevoy Super Hybrid Battery." The technology will be used in Zeekr's first hybrid vehicle, the 9X SUV, which has a range of 380 kilometers on a single charge and is set to begin deliveries in China by the end of September, a statement said. — CNBC's Michael Bloom contributed to this report.
Yahoo
24-05-2025
- Automotive
- Yahoo
Macquarie Upgrades XPeng (XPEV) to Outperform
On May 22, Macquarie upgraded its rating on XPeng Inc. (NYSE:XPEV) from Neutral to Outperform, lifting the price target from $22 to $24. Eugene Hsiao from Macquarie made this upgrade following XPeng's strong Q1 2025 report, another quarter that is leading the company towards net profit. For the past seven quarters, XPeng's gross margin has improved, with Q1's gross margin reported at 15.6%. During Q1, the company lowered its losses from $190 million in the same quarter last year to around $91.6 billion. Hsiao mentioned that the company's goal of profitability seems evident with record deliveries during the quarter. XPeng's management expects the company to become profitable by the fourth quarter of 2025. An assembly line of electric cars moving along a production line. The company completed delivery of 94,008 vehicles during Q1. The company's revenue was around $2.20 billion, exceeding estimates by $17.42 million. XPeng's Vehicle sales revenue soared over 159% from a year ago, lowering the losses incurred compared to last year. Hsiao added that XPeng Inc. (NYSE:XPEV) is now covering its previous scale challenges. The analyst believes that the Chinese Smart EV maker can 'kick-start a growth cycle' through its M03 and P7+ vehicles, reclaiming its EV market share. XPeng has announced the launch of the 2025 models for G6, G9, and Mona Max, while the company expects to begin the deliveries of G7 and the latest P7 models in Q3. XPeng Inc. (NYSE:XPEV) is a well-known Chinese Smart EV manufacturer. It is engaged in the design, production, and marketing of Smart EVs. XPeng's famous vehicles include the SUV (the G3) and a four-door sports sedan (the P7). The company mainly targets the mid to high-end EV segment in China's passenger vehicle market. While we acknowledge the potential of XPEV to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than XPEV and that has 100x upside potential, check out our report about this cheapest AI stock. Read Next: and . Disclosure. None.
Yahoo
24-05-2025
- Automotive
- Yahoo
Macquarie Upgrades XPeng (XPEV) to Outperform
On May 22, Macquarie upgraded its rating on XPeng Inc. (NYSE:XPEV) from Neutral to Outperform, lifting the price target from $22 to $24. Eugene Hsiao from Macquarie made this upgrade following XPeng's strong Q1 2025 report, another quarter that is leading the company towards net profit. For the past seven quarters, XPeng's gross margin has improved, with Q1's gross margin reported at 15.6%. During Q1, the company lowered its losses from $190 million in the same quarter last year to around $91.6 billion. Hsiao mentioned that the company's goal of profitability seems evident with record deliveries during the quarter. XPeng's management expects the company to become profitable by the fourth quarter of 2025. An assembly line of electric cars moving along a production line. The company completed delivery of 94,008 vehicles during Q1. The company's revenue was around $2.20 billion, exceeding estimates by $17.42 million. XPeng's Vehicle sales revenue soared over 159% from a year ago, lowering the losses incurred compared to last year. Hsiao added that XPeng Inc. (NYSE:XPEV) is now covering its previous scale challenges. The analyst believes that the Chinese Smart EV maker can 'kick-start a growth cycle' through its M03 and P7+ vehicles, reclaiming its EV market share. XPeng has announced the launch of the 2025 models for G6, G9, and Mona Max, while the company expects to begin the deliveries of G7 and the latest P7 models in Q3. XPeng Inc. (NYSE:XPEV) is a well-known Chinese Smart EV manufacturer. It is engaged in the design, production, and marketing of Smart EVs. XPeng's famous vehicles include the SUV (the G3) and a four-door sports sedan (the P7). The company mainly targets the mid to high-end EV segment in China's passenger vehicle market. While we acknowledge the potential of XPEV to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than XPEV and that has 100x upside potential, check out our report about this cheapest AI stock. Read Next: and . Disclosure. None. Sign in to access your portfolio
Business Recorder
25-04-2025
- Business
- Business Recorder
China, HK stocks register gains on tariff relief
HONG KONG: China and Hong Kong stocks edged up on Friday, registering their second consecutive weekly gains, as the US and China both softened their attitudes towards a full-on trade war to investors' relief. China's blue-chip CSI300 index rose less than 0.1% at close, while the Shanghai Composite index was little changed. The Hang Seng Index added 0.3% in Hong Kong. That took the gains for the holiday-shortened week to 2.7%, the best performance in nearly two months. All three indexes notched up a second week of gains and stood near their highest levels since April 3, when US President Donald Trump announced 'reciprocal tariffs' on US imports and triggered a market rout across the globe. Beijing has granted some exemptions on US imports from its 125% tariffs in an effort to mitigate the economic fallout from the trade war, Reuters reported on Friday. That follows a shift in tone from the White House this week, which is considering easing tensions with China. US President Donald Trump also said on Thursday that trade talks between the two countries were underway. Also lifting the mood, the Politburo of China's Communist Party said on Friday that it will support firms and workers most affected by the impact of US tariffs, and ease monetary policy to maintain stability at home. Still, markets will stay cautious and remain in wait-and-see mode at the moment given the recent volatility, said Eugene Hsiao, head of China equity strategy at Macquarie Capital, Hong Kong. Tech shares lifted both onshore and offshore markets on Friday. The CSI Artificial Intelligence Index added 1% and the chip sector sub-index erased earlier losses to climb 0.2%.
Economic Times
25-04-2025
- Business
- Economic Times
China, Hong Kong stocks register second week of gains on tariff relief
China and Hong Kong stocks edged up on Friday, registering their second consecutive weekly gains, as the U.S. and China both softened their attitudes towards a full-on trade war to investors' relief. ADVERTISEMENT ** China's blue-chip CSI300 index rose less than 0.1% at close, while the Shanghai Composite index was little changed. ** The Hang Seng Index added 0.3% in Hong Kong. That took the gains for the holiday-shortened week to 2.7%, the best performance in nearly two months. ** All three indexes notched up a second week of gains and stood near their highest levels since April 3, when U.S. President Donald Trump announced "reciprocal tariffs" on U.S. imports and triggered a market rout across the globe. ** Beijing has granted some exemptions on U.S. imports from its 125% tariffs in an effort to mitigate the economic fallout from the trade war, Reuters reported on Friday. ** That follows a shift in tone from the White House this week, which is considering easing tensions with China. U.S. President Donald Trump also said on Thursday that trade talks between the two countries were underway. ADVERTISEMENT ** Also lifting the mood, the Politburo of China's Communist Party said on Friday that it will support firms and workers most affected by the impact of U.S. tariffs, and ease monetary policy to maintain stability at home. ** Still, markets will stay cautious and remain in wait-and-see mode at the moment given the recent volatility, said Eugene Hsiao, head of China equity strategy at Macquarie Capital, Hong Kong. ADVERTISEMENT ** Tech shares lifted both onshore and offshore markets on Friday. The CSI Artificial Intelligence Index added 1% and the chip sector sub-index erased earlier losses to climb 0.2%. ** The Hang Seng Tech Index eased earlier gains to 0.1% in Hong Kong, while the AI-related sub-index added 0.3%. ADVERTISEMENT ** "We are adopting a barbell approach favouring the technology and consumer staples, and we particularly favour companies with pricing power and business models that are relatively sheltered from tariff headwinds," said Eli Lee, chief investment strategist at Bank of Singapore. (You can now subscribe to our ETMarkets WhatsApp channel)
