MVST's Huzhou Phase 3.2: CapEx Trends Support Expansion Plans

Microvast Holdings' MVST Huzhou Phase 3.2 project is key to expanding its production capacity. This APAC-focused plan is expected to commence initial production operations during the first quarter of 2026, adding nearly 2 GWh of annual production capacity. The primary objective of this expansion plan is to address the robust customer demand for top-notch solutions and position the company to grab opportunities.

MVST’s capital expenditure trajectory supports this strategic expansion. In the third quarter of 2025, the company recorded a capital expenditure of $17.4 million, with $15.5 million primarily allocated to the expansion plan. It is impressive how the company has managed to control its CapEx from $30.6 million in the same quarter last year. Prudent expense management maintains MVST’s focus on high-return capacity expansions rather than building an asset base.

While the investment trajectory may appear promising, MVST is prone to operational execution risks. The company’s plan to complete the installation and commissioning of production equipment for the expansion by the year-end might be affected by supply chain disruptions, affecting the timing and scalability of capacity.

On the other hand, this strategic expansion is expected to contribute to top-line growth and margin expansion. Management stated that it expects revenues to increase 18-25% and gross margin to hover within 32-35%. This optimism is influenced by production scalability to be facilitated by the Huzhou Phase 3.2 expansion, positioning the company to gain a competitive edge in this fast-paced, advanced battery market.

MVST’s Price Performance, Valuation & Estimates

Microvast has soared 357.6% in a year, significantly outperforming Dave DAVE, First Advantage Corporation FA and the industry as a whole. The industry has moved down marginally. Dave has gained 131.9%, while First Advantage Corporation has declined 31%.

1-Year Share Price Performance

From a valuation standpoint, MVST trades at a 12-month forward price-to-earnings ratio of 17.31, below the industry’s 22.65. It is trading at a premium when compared with Dave's and First Advantage Corporation’s 14.67 and 10.89, respectively.

P/E - F12M

Microvast and Dave have a Value Score of D, while First Advantage Corporation holds a Value Score of B.

The Zacks Consensus Estimate for MVST’s earnings per share for 2025 and 2026 has decreased 10.5% and 31%, respectively, over the past 60 days.

Microvast carries a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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