UBS: Contemporary Amperex Technology (03750) exceeded expectations in the first quarter. Management emphasized strong orders in April and May.

UBS released a research report stating that Contemporary Amperex Technology's performance in the first quarter of this year exceeded expectations. Net profit increased by 49% year-on-year to 20.7 billion RMB, benefiting from accelerated deliveries, but decreased by 10% quarterly due to seasonal factors, which is equivalent to 23% of the bank's and market's full-year forecast. Excluding non-recurring items, net profit increased by 53% year-on-year to 18.1 billion RMB. UBS now provides a target price of 500 RMB and a "buy" rating for Contemporary Amperex Technology (300750.SZ), and expects to learn more about new generation battery products, solutions, and ecological strategies at the Super Tech Day held on the 21st of this month. Management emphasized strong orders in April and May and expects capacity utilization to remain at a high level of 85% to 90% in the first and second quarters. Although the company did not adjust prices in the first quarter, it is expected that gross profit margin may decline year-on-year in the second quarter due to rising commodity costs and a high base, but management stated that most changes in raw material costs can be passed on.