CATL shares clouded by bleak outlook

Contemporary Amperex Technology Co (CATL) has received little love following its splashy US$5.3 billion (S$6.8 billion) listing in Hong Kong in May, as investors eye multifold challenges in the global electric vehicle (EV) battery market.

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Its Shenzhen-listed shares are down more than 7 per cent from a high in May, weighed down by concerns over heightened competition in China's market, US tariff threats and slowing demand. The Hong Kong stock remains 19 per cent above its listing price, though there are large wagers on a decline.

Investors are struggling to find the next big growth driver, with the Chinese EV market maturing and worries that batteries are becoming commoditised. Quarterly sales for CATL, the world's biggest EV battery-maker, have missed analyst estimates for seven consecutive quarters.

"It all comes down to the longevity of the growth trajectory for CATL," said Mr Jerry Wu, a London-based fund manager at Polar Capital, who holds a small position in the stock. "China is halfway through in electric vehicle penetration, and what's the growth beyond China EV?"