CATL posts record quarterly profits amid green energy boom
Chinese battery giant CATL reported stronger-than-expected second-quarter profit, driven by robust growth in its energy storage business that helped offset softer demand in the electric vehicle market.
Chinese battery giant Contemporary Amperex Technology Co Limited (CATL) slightly missed market estimates for second-quarter revenue and net profit, as China’s weakening demand for electric vehicles (EVs) outweighed benefits from the energy shock.
The world’s largest battery maker reported a record 147.79 billion yuan (US$21.8 billion) in revenue and a record 22.5 billion yuan in net profit for the second quarter, up 56.92 per cent and 36.5 per cent year on year, respectively, according to an exchange filing on Friday evening.
The results, despite being record figures, slightly missed market estimates of 148.6 billion yuan in revenue and 23.4 billion yuan profit.
Still, it was the weakest quarterly profit growth in over a year. Revenue rose 56.9% to 147.8 billion yuan in the second quarter, compared with a 52.5% increase in the January-March period.
CATL has identified energy storage as a main growth driver as the EV industry matures and battery makers grapple with intensifying competition and margin pressure.
The supplier to automakers including Tesla, BMW and Volkswagen held a 40.2% share of the global EV battery market in the January-May period, according to SNE Research.
Growth in the EV market has slowed, particularly in China, where a prolonged price war has pressured automakers and suppliers alike.
CATL has accelerated its expansion in energy storage to capture rising demand from power grids and renewable energy projects. Its lithium-ion energy storage battery shipments nearly doubled in the first quarter, lifting its global market share to 29.9% from 26.9% a year earlier, SNE Research said.
The company has also stepped up its overseas expansion. In addition to battery plants in Germany and Hungary, CATL raised $5 billion in a Hong Kong listing in May, with proceeds earmarked largely for international expansion.
CATL’s gross margin for energy storage batteries fell to 24.0% in the first half from 25.5% a year earlier, while gross margin for EV batteries, still the company’s largest business segment, decreased by 1.8 percentage points to 20.6%.
The company also said on Friday that it plans to buy back its A-shares worth 20 billion to 40 billion yuan.
