Valuation of CATL Based on FCFF, Residual Income and Relative Valuation Model

Abstract

China’s new energy vehicle industry is in a period of vigorous development: rapid expansion of market size, continuous progress of technology, strong policy support, gradual improvement of charging and power exchange infrastructure and positive benefits to the environment are gradually emerging. As an industry leader, the valuation of the CATL is of great significance to the value of the new energy vehicle industry. Based on FCFF model, residual income model and relative valuation model of P/E method, the author makes a valuation of CATL, and carries out sensitivity analysis of key parameters. By comparing the valuation results of the three models with the current stock price, it is concluded that the stock price in the CATL is undervalued and recommends buying. Based on the macro environment of the new energy battery industry and the competitiveness of CATL, it is best to hold for a long time and supplemented by a diversified investment strategy. These results not only serve the investment decisions of investors, but also reflect the development prospects of its industry, health and stability of the entire securities market.