Citigroup: Initiates a 30-day downward catalyst observation on CALB (03931) with a target price of HK$33.4.

Citigroup released a research report stating that it has initiated a 30-day downward catalyst observation on CALB (03931) because the bank believes that the company faces downward gross margin pressure in the context of rising costs, including lithium, copper, and electrolyte. Citigroup has a "buy" rating on the company, as it has a strong record in introducing key customers, with a target price of HK$33.4, based on a forecasted P/E ratio of 20.6 times in 2026. Citigroup believes that, unlike most other Chinese battery companies, CALB is a state-owned enterprise with a flexible management mechanism. The bank believes that the strategic insights and strong execution capabilities of the management team are crucial for the company to turn the situation around. The management plans to increase structural R&D expenses in the coming years, which Citigroup believes can enhance its product competitiveness and help save costs.