CATL launches record A-share buyback after H1 profit jumps 42%

CATL posted first-half net profit of 43.3 billion yuan ($6.39 billion), up 42% as energy-storage demand offset weaker EV sales.

"The company's development, financials, profitability and market position are all trending positively, but the current stock price is undervalued due to market turbulence — this is the core logic behind the buyback," CATL management said during a July 24 investor meeting following the earnings release, according to a local media report.

Revenue climbed 55% to 276.9 billion yuan in the first six months. The energy-storage business drove much of the growth, with China's ESS battery shipments more than doubling in the first four months of 2026, according to Bernstein. Data center demand for storage systems, fueled by the AI infrastructure buildout, contributed to the surge. The EV battery segment faced headwinds from softening consumer demand in China, though new-energy vehicles continued to outsell gasoline-powered cars.

The buyback — the largest single share repurchase in A-share history — reflects management's conviction that the stock is undervalued. CATL shares have risen 24% in Hong Kong this year, outperforming the Hang Seng Index's nearly 3% decline. Management said the buyback will not become a routine practice and will be evaluated case by case based on regulatory requirements and financing capacity.

CATL has pushed to expand overseas to sustain its growth trajectory. The company is ramping up production at its Hungary plant, expanding battery-swapping infrastructure in Europe and advancing the commercialization of sodium-ion batteries. Growing concerns about energy security have accelerated global investment in renewable energy and battery storage, benefiting the Chinese battery giant's export business.

CATL's strong results contrast with challenges facing some of its Chinese peers. BYD, the country's largest EV maker and a CATL customer, has been cutting prices to defend market share, pressuring margins across the supply chain. CATL's dominant market position — it holds more than 40% of China's EV battery market — has helped it maintain pricing power and profitability.

The buyback also puts pressure on other A-share blue chips to consider similar capital return actions. With the CSI 300 index trading near multi-year lows, companies with strong balance sheets face growing investor demand for share repurchases and higher dividends.

The repurchase program could absorb selling pressure and stabilize the stock, potentially triggering a re-rating across the Chinese EV battery sector. Investors will watch for the buyback's execution timeline and any further capital return announcements from CATL.

This article is for informational purposes only and does not constitute investment advice.