Lyon: Contemporary Amperex Technology (03750) has multiple positive factors for potential H-share fundraising of $5 billion. Reaffirms "highly confident - outperform the market" rating.

Lyons released a research report stating that, based on the Sum-of-the-Parts (SOTP) valuation method, the target price for the A-share of Contemporary Amperex Technology (300750.SZ) is 505 yuan; the target price for the H-share of Contemporary Amperex Technology (03750) is 710 Hong Kong dollars, with a reiterated "High-Conviction Outperform" rating. It is reported that Contemporary Amperex Technology is considering a H-share share placement of up to US$5 billion. The bank believes that if the fundraising does take place, the positive factors outweigh the negative ones. The potential fundraising of US$5 billion is only equivalent to a dilution of 1.2% of the existing issued shares, which is not significant; but the H-share liquidity will increase by about 33%, which is a significant improvement and provides investors with the opportunity to increase their positions to capture the growth story of energy storage systems (ESS) in the coming years. Lyons pointed out that from a fundamental perspective, as of the end of 2025, Contemporary Amperex Technology had cash on hand of US$49 billion (333 billion yuan), and its balance sheet was in a net cash position. There is no urgent need for funds in the short term. However, additional funds could provide greater flexibility for capital expenditures and research and development, especially in future battery technologies such as solid-state batteries.