Munro Concentrated Global Growth Fund on Contemporary Amperex Technology Co. Limited
Thesis
CATL commands more than one-third of the global EV battery market and benefits from scale, product quality and persistent R&D investment. Munro sees long-term storage growth supported by China’s relatively low battery capacity compared with renewable generation. It also believes contractual lithium cost pass-throughs and the difficulty automakers face in manufacturing competitive cells protect CATL’s economics and customer relationships. Sodium-ion and solid-state technology could broaden applications beyond EVs into robotics, aviation and data centres. Following a more than 20% selloff the fund cut its position for risk-management reasons but retained a positive view, citing a valuation below 20 times earnings.
“We therefore don’t expect this to erode CATL’s market share quickly, if at all.”
Key risks
- Energy-storage growth of around 100% this year proving unsustainable in 2027
- Weak Chinese EV demand and rising lithium prices compressing battery margins
- CATL’s Jianxiawo lithium mine remaining shut because of licensing and environmental permitting issues
- Automakers developing internal battery manufacturing to reduce dependence on CATL