CATL Net Profit Surges 80% YoY in First Three Quarters of 2023

CATL (300750:SZ) has disclosed the financial report of the third quarter in 2023, indicating that for the first three quarters, it has achieved the cumulative operating revenue of CNY 294.68 billion and an increase of 40.10%; net profit of CNY 31.15 billion, marking a substantial 77.05% year-on-year increase; and primary earnings per share CNY 7.10.

The total asset impairment provision of CNY 3.10 billion in the first three quarters has led to the reduction of the parent company's net profit of CNY 2.63 billion, correspondingly decreasing the shareehloders' equity of CNY 2.63 billion on 30 September. In the third quarter, CATL achieved revenue of CNY 105.43 billion, increasing by 8.28% year on year, and net profit of CNY 10.43 billion, up 10.66 % year-on-year.

Regarding the dramatic growth of revenue, CATL demonstrated that it was resulted by the growth of business scale. In addition, the corporate R&D expenses in the first three quarters reached CNY 14.88 billion, a year-on-year increase of 40.65%. CATL expressed that it continued to increase R & D investment, lauch more R & D projects and expand R & D teams, thus the R&D expenditure increased compared with the previous period.

The rapid expansion in global markets has brought competitive advantages for CATL. According to the data from SNE Research, from January to August 2023, the market share of power battery usage of CATL maintained the top-1 in the world, and the share of overseas grew steadily, of which the share of Europe reached 34.9%, an increase of 8.1% year-on-year. With the recognition of the global mainstream automobile enterprises has been enhanced, CATL made further breakthroughs overseas. In the first half of 2023, the operating income of overseas battery business was CNY 65.68 billion, up 195% year-on-year.

In terms of supply chain management, CATL has upgraded the layout of battery mineral resources and upstream materials through self-made mining, investment and shareholding, joint venture and cooperation, recycling, building a more resilient supply chain. During the period, CATL promoted the investment, construction and operation of lithium, nickel, phosphorus and other resource projects. Specifically, CATL has attained 100% ownership of Sinuowei Mining Development Co., Ltd. (Chinese: 斯诺威矿业发展有限公司), and promoted projects such as lithium-containing porcelain clay mine in Yichun, Jiangxi smoothly.

From the perspective of power batteries, the heat dispersion-free technology battery products of CATL have gained worldwide recognition and been applied in batch steadily. Kirin batteries have been mass-produced and loaded to support CLTC models with a combined operating range of more than 1,000Km to hit the market. The newest cohesive batteries have been released to broaden the application scenarios centred on high safety and lightweighting, whiler the 4C Kirin batteries' premiere platforms and sodium-ion batteries' premiere models have been announced to push forward the industrialisation of M3P.

Finally, CATL has made efforts to achieve synergy through strategic partnership. Recently, the cooperation between CATL and veichle companies has been intensively announced. On October 16, Chery Group and CATL jointly announced that Shenxing supercharging battery had applied in practice in Chery Road Star. It is reported that it takes only two months for the rechargeable battery to be released to the first model and it is expected to be mass-produced by the end of 2023. The model equipped with Shenxing supercharging battery will be officially put into the market in the first quarter of 2024.

On 17 October, BJEV and CATL announced that BAIC New Energy's high-end intelligent electric vehicle brand, Extreme Fox, will be equipped with the Shenxing supercharging battery. Meahwhile, the two parties promised to build a closer strategic partnership in the field of power batteries, through product and technology empowerment as well as business model exploration to comprehensively tackle the technical challenges including super-charging heat, ultra-fast charging at the battery pack level, and how to balance long battery life and lightweight.

As of press time, CATL closed at CNY 182.10 apiece, with a market capitalization of CNY 800.73 billion.