HK Stock Market Move | Contemporary Amperex Technology (03750) rose nearly 5% in the afternoon, with the stock price returning above 500 Hong Kong dollars.

Contemporary Amperex Technology (03750) rose nearly 5% in the afternoon, rising by 4.86% at the time of drafting, to 505 Hong Kong dollars, with a trading volume of 9.69 billion Hong Kong dollars. On the news front, Soochow stated that the rise in lithium prices is impacting mid-to-low-end demand, but Contemporary Amperex Technology is less affected. According to the bank's calculations, for domestic medium storage projects, the price of battery cells has increased by 2-3 cents/wh, leading to a 1% decrease in IRR. The current battery cell price corresponds to a 4% decrease in IRR, causing delays in low-yield projects, while Contemporary Amperex Technology's batteries are more geared towards high-yield projects and overseas markets. In terms of power, Ningde has a higher proportion in high-end vehicle models with low cost sensitivity, therefore the demand impact is limited. The bank still expects the company to produce 1.1TWh this year, a 50% increase year-on-year, with shipments reaching 900GWh. Morgan Stanley previously indicated that they expect Contemporary Amperex Technology's stock price to outperform the industry average in the next 15 days, with a probability of approximately 70% to 80%. Morgan Stanley stated that Contemporary Amperex Technology's recent price pullback has made short-term valuations more attractive. The bank believes that the market is overly concerned about cost inflation pressure on the company's profit margins, which will ultimately be passed on. Contemporary Amperex Technology has proven its ability to pass on costs in the previous lithium price uptrend cycle, and they expect its lithium mines to resume production in the short term.