China’s coal king is catching up with its new battery champions

CHINA’S battery giants are at the forefront of the global energy transition; but on the stock market, they are being outshone by the dirtiest fossil fuel.

Coal miner China Shenhua Energy’s market capitalisation is closing in on that of Contemporary Amperex Technology Ltd (CATL), after surpassing BYD in late November. This is a stark difference from February last year, when CATL’s valuation was more than double that of Shenhua’s. 

The diverging fortunes underscore the staying power of fossil fuels even as the world tries to decarbonise. Shares of Shenhua, China’s largest listed coal miner, have risen 23 per cent in the past year as authorities pushed mining output to record highs in a drive for energy security. The company’s shares in Hong Kong are near the highest level in over a decade.  

CATL and BYD’s share prices have plunged even as they have experienced real-world success. CATL dominates global battery sales, but increased competition has sent prices for energy storage devices falling. BYD overtook Tesla last quarter to become the world’s biggest electric vehicle producer, but is mired in a price war with rivals.

Still, analysts are betting on a rebound for the companies behind the energy transition. The average 12-month price targets for CATL and BYD are 74 per cent and 61 per cent above current levels, respectively, according to data compiled by Bloomberg. By contrast, Shenhua shares closed just above the average target on Thursday.