BEIJING (Reuters) – Chinese electric vehicle battery maker CATL posted its first drop in quarterly net profit since the second quarter of 2022 on Friday as it wrestled with smaller competitors amid slowing demand in the world's largest auto market.
CATL's profit for the October-December period in 2023 totalled 12.98 billion yuan ($1.8 billion), down 1.2% from a year earlier. That compared with growth of 10.7% in the third quarter and 43.6% for the whole of last year.
Nevertheless, the EV battery specialist regained market share in the opening months of 2024, with industry data on Monday showing it dominating more than 50% of its home market for the first time since November 2022.
CATL's market share by batteries in China-made EVs was 55.2% in February, up 5.75 percentage points from January, data from the China Automotive Battery Innovation Alliance (CABIA) showed.
By comparison, the combined share of second-ranked BYD and third-placed CALB edged up slightly to 24.1%, but was down from nearly 30% at the end of 2023.
Morgan Stanley said in a report on March 10 that it expected a re-rating of CATL shares to overweight from equal-weight as it was seeing "multiple inflection points in fundamentals".
"Battery overcapacity associated with the opening of the supply chain bottleneck led to battery price competition throughout 2023," Morgan Stanley analysts said.
CATL is also a majority investor in a battery plant in Beijing, in partnership with the EV arms of Beijing Automotive Group (BAIC) and Xiaomi, BAIC BluePark New Energy Technology said in an exchange filing on Sunday.
The EV battery giant will invest 510 million yuan in the joint venture with registered capital of 1 billion yuan.
CATL stock closed up 14.5% at 180.9 yuan on March 11 after the Morgan Stanley report, marking its biggest one-day gain in more than three years. Its shares edged down 1.53% to 181 yuan on Friday and closed 14.6% higher for the week.
The world's largest EV battery marker is also in discussions to set up research and development centres in Hong Kong to underpin technology exports, its chairman told reporters on the sidelines of China's annual meeting of parliament.