Moody’s boosts Contemporary Amperex

Moody's Ratings said it upgraded Contemporary Amperex Technology Co., Ltd.'s issuer rating to A3 from Baa1 and the backed senior unsecured rating on the notes issued by its wholly subsidiary Contemporary Ruiding Development Ltd. to A3 from Baa1. CATL guarantees the notes. The agency also revised the outlook to stable from positive.

"The upgrade reflects our expectation that CATL's credit profile will stay strong with steady earnings, low leverage and an increasing net cash position, even as price competition is constraining revenue growth," said Chenyi Lu, a Moody's Ratings vice president and senior credit officer, in a press release.

"The stable outlook reflects our expectation that CATL will maintain its leading position in China's electric vehicle battery market, and continue to well balance growth needs with a strong credit profile commensurate with its A3 ratings," Lu added.

The agency said it forecasts CATL’s revenue to grow by about 4% to RMB 417 billion in 2024, its adjusted EBITA margin to narrow to around 13.5%-14% over the next two years from 14.9% in 2023 and its leverage, as measured by adjusted debt/EBITDA, to dip below 1.5x over the next 12-18 months from 1.6x in 2023.

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