CH Battery: D/G CATL-H to N, JP Auto on EU-CH Headline, Hyundai Rotem Review

J.P. Morgan downgraded China's battery value chain on policy and returns pressure from the battery consumption tax, lower export VAT rebates and rising trade barriers. It cut CATL's 2026/2027 net profit forecasts to Rmb89bn/Rmb99.7bn, 6%/15% below consensus, implying ~Rmb0.08/Wh unit profit in 2027; CATL-H was downgraded to Neutral while CATL-A remains Overweight, and CALB, EVE, Wuxi A/H and Putailai were also downgraded. In Japan autos, the EU agreed to enact auto-related legislation in 2026 including (P)HEV import regulation; a ~350k-unit annual import cap could benefit Japanese HEV sales in Europe but raises diversion risk, with Toyota relatively resilient. Hyundai Rotem's 3Q26 operating profit was in line, defense OPM beat on cost write-backs, but 2027 sales are guided flat with weaker OP; JPM maintains Neutral with a W110k target price.