On the evening of July 24th, CATL released two documents in quick succession: a semi-annual performance forecast for 2026 and a plan to repurchase A-shares worth between 20 and 40 billion yuan.

The semi-annual report figures are concise: operating revenue reached 276.917 billion yuan, a year-on-year increase of 54.80%. Net profit attributable to the parent company was 43.284 billion yuan, a year-on-year increase of 41.98%. Net profit excluding non-recurring gains and losses was 39.013 billion yuan, up 43.44% year-on-year. Basic earnings per share were 9.51 yuan, and the weighted average return on net assets was 12.08%.

Simultaneously, the company plans to distribute a cash dividend of 14.11 yuan (including tax) for every 10 shares held. Based on a total share capital of 4.598 billion shares after deducting repurchased shares, the total cash dividend amounts to approximately 6.5 billion yuan.

The share repurchase plan is a pleasant surprise. The company intends to repurchase A-shares through centralized bidding using its own or self-raised funds. The repurchase amount is set at "20-40 billion yuan," with a maximum repurchase price of 573 yuan per share. The repurchase period is within 12 months from the date of shareholder approval. The repurchased shares will be cancelled to reduce the registered capital.

Based on the upper limit of 40 billion yuan and a price of 573 yuan per share, it is estimated that approximately 69.808 million shares will be repurchased, accounting for 1.51% of the company's total share capital. Based on the lower limit of 20 billion yuan, approximately 34.904 million shares, or 0.75% of the total, will be repurchased. This scale is a rare move in the history of A-share repurchases.

The Driving Force Behind the Revenue Acceleration

Looking at the longer-term trend, the figure of 276.917 billion yuan is not a matter of luck.

Semi-annual revenue has followed an accelerating upward curve: from 166.8 billion yuan in the first half of 2024, to 195.2 billion yuan in the second half of 2024, then 178.9 billion yuan in the first half of 2025, 244.8 billion yuan in the second half of 2025, and finally 276.9 billion yuan in the first half of 2026.

The 54.80% year-on-year growth rate is a three-year high following a 9.7% decline in 2024. The full year of 2024 was characterized by a "price up, volume down" scenario, with a 9.7% revenue decline and a 15.0% increase in net profit. By 2025, the trend reversed to a 17.0% revenue increase and a 42.3% net profit increase. In the first half of 2026, year-on-year growth rates surged to 55% and 42%, confirming the inflection point.

The driving force is twofold. In the power battery sector, according to data from the China Automotive Power Battery Industry Innovation Alliance, CATL's market share in domestic passenger vehicle battery installations reached 46.7% in the first half of 2026, a year-on-year increase of 5.6 percentage points. Its share of the domestic ternary power battery market was 75.2%, up 4.3 percentage points year-on-year. The company's market share has not only been maintained but has returned to the high-activity levels of 2022-2023.

Energy storage is the other main storyline. The company's announcements reveal that CATL has signed a 3-year, 60 GWh strategic cooperation agreement for sodium-ion battery energy storage with Hyperstrong. It has also implemented a 2 GWh single-unit large-scale independent energy storage project with supply chain partners. Internationally, CATL has won bids for multiple energy storage system integration projects in Germany, Spain, Chile, Malaysia, and Australia, with some European projects covering black-start scenarios.

Data from a BOCOM International research report shows: "In June, total sales of power and energy storage batteries were 196.0 GWh, a year-on-year increase of 49.1%. Among them, sales of energy storage batteries were 62.6 GWh, a year-on-year increase of 67.5%." Energy storage has become a core driver of battery demand growth.

There is also a structural context: 2026 marks the first year of large-scale overseas capacity production for the company. Its market share in overseas power batteries is steadily increasing. This shift has turned the "going global" strategy from an option into a main battlefield.

Four Interpretations of the 20-40 Billion Yuan Buyback

The buyback plan itself has three key figures: a lower limit of 20 billion yuan, an upper limit of 40 billion yuan, and a maximum price of 573 yuan per share. The signals conveyed by these three numbers are far more significant than they appear on the surface.

The first interpretation relates to the company's view of its current valuation. As of the close on July 22nd, CATL's A-share price was approximately 372 yuan per share. The maximum buyback price of 573 yuan represents a premium of about 54% over the current price. It is rare for a publicly listed company to repurchase its own shares at a price significantly higher than the secondary market price. This is effectively the company's management telling the market: "The price you are offering is half of what we are willing to pay for our own stock."

The second interpretation juxtaposes the scale of the buyback with the company's profitability. The buyback range of 20-40 billion yuan is equivalent to 46%-92% of the company's first-half net profit attributable to the parent company. In the A-share market, it is almost unheard of for a company to be willing to use half or even a full year's worth of profit to repurchase and cancel its own shares.

Comparing the upper limit of the buyback to the company's full-year net profit of 72.2 billion yuan in 2025, it is equivalent to using half a year's earnings to shrink the company. From a capital structure perspective, this is an extremely rare instance of proactive balance sheet reduction through a buyback in A-share history.

The third interpretation concerns the accounting implications of cancellation and capital reduction. Cancelling the repurchased shares and reducing the registered capital means the total share capital is permanently reduced. Under the upper limit scenario, approximately 1.51% of the total shares would be cancelled, passively increasing earnings per share from 2027 onwards by the same proportion. The net asset value and earnings per share weight of each share held by long-term investors would be amplified.

The fourth interpretation is the confidence derived from the company's cash flow. The source of funds for the repurchase is "own or self-raised funds." This indicates that the company has sufficient cash on its books or readily realizable current assets to support such a large-scale action. The company's semi-annual report shows that its total monetary funds and trading financial assets still amount to the hundreds of billions of yuan.

However, it is important to note that "own funds" also implies that this cash was originally planned for expansion, R&D, or industrial chain investment. Converting it into a shareholder distribution through a buyback and cancellation, coupled with a proactive balance sheet reduction, also means that the company has significantly raised the priority of its own valuation recovery.

Returning to the buyback plan itself: at a time when its market share has returned to 47%, gross margins are under short-term pressure, and the stock price is around 372 yuan, CATL has provided not just a semi-annual report, but a clear statement of its own position on its stock.