BOCOM INTL: Maintains "Buy" rating on CALB (03931) with a target price of HKD 40.25

BOCOM INTL released a research report stating that considering CALB (03931)s growth in its power and energy storage business has exceeded previous expectations, the bank has raised its revenue forecasts for 2026-2028 by 3%-14% to 70.561/91.169/106.673 billion yuan, and increased its net profit forecast attributable to shareholders by 3%-6% to 2.633/3.816/4.73 billion yuan. Based on the DCF model and rolling the valuation benchmark to 2027, the target price has been slightly adjusted to HKD 40.25. The bank remains optimistic about the company's increased share in power and energy storage, continuous breakthroughs in overseas customers, and profit improvements from economies of scale, maintaining a "Buy" rating. BOCOM INTL's main points are as follows: Economies of scale drive profit growth faster than revenue; contributions from energy storage and overseas business increase. In the first half of 2026, the company's revenue was 27.084 billion yuan, an increase of 65.0% year-on-year; net profit attributable to shareholders was 935 million yuan, up 100.7% year-on-year, with profit growth significantly outpacing revenue. Although gross profit margin decreased by 0.8 percentage points year-on-year to 16.7%, the combined ratio of sales, administration, and R&D expenses dropped by approximately 2.5 percentage points year-on-year to 8.0%, leading to an increase in net profit margin attributable to shareholders by 0.6 percentage points year-on-year to 3.5%. By business segment, revenue from power batteries grew 54.8% year-on-year to 16.506 billion yuan; revenue from energy storage system products and others increased by 83.8% year-on-year to 10.579 billion yuan, with its revenue share rising by 4.0 percentage points year-on-year to 39.1%. The expansion of overseas business accelerated, with overseas revenue in the first half of the year increasing by 262.9% year-on-year to 1.185 billion yuan, raising its share from 2.0% to 4.4%. In terms of cash flow, operating cash flow net inflow was 2.864 billion yuan, up 12.0% year-on-year, but capital expenditures rose significantly by 113.3% year-on-year to 15.820 billion yuan, indicating that investment in capacity expansion remains at a high level. Power batteries outperformed the industry; continued breakthroughs in new customers and overseas markets. According to SNE Research, in the first half of 2026, the company's global power battery shipments reached 31.2 GWh, an increase of 39.5% year-on-year, significantly outpacing the global industry growth rate of 20.0%; among these, the shipment volume in overseas markets was 6.3 GWh, up 80.5% year-on-year. In terms of passenger vehicles, projects with XPeng, Harmony Sensing, and Toyota are steadily being delivered, and mass production of the Xiaomi project has commenced, while new overseas platforms from Volkswagen, Hyundai, and others continue to progress. The commercial vehicle shipment volume grew by 225% year-on-year, further expanding the coverage of customers in light commercial vehicles, heavy trucks, and construction machinery. In the energy storage sector, according to SNE Research, the company shipped 31.5 GWh of energy storage batteries in the first half of 2026, ranking fifth globally with a market share of approximately 6.8%; the company continues to advance the delivery of 314Ah/392Ah cells, achieving mass production of 588Ah and 600+Ah large cells, and is expanding into electricity storage, industrial and commercial storage, household storage, and AIDC scenarios.