The STAR 50 Index plunged more than 40% from its July peak, while CATL fell 37% since the start of the year as investors questioned the profitability of artificial intelligence investments. What began as profit-taking turned into a broader correction across China’s technology sector, where valuations had moved far ahead of fundamentals. Despite roughly 59% revenue growth in the third quarter, CATL’s net profit rose only about 15%, reflecting intense competition, product mix shifts and changes to taxes and incentives. Weak consumption, the prolonged property downturn and uncertainty over AI monetization are weighing on earnings, although some strategists believe reduced valuations could limit further downside.
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