EV Sales Recovery Helps CATL Gain Profit of CNY 1.42 Bn in 3Q 2020

Industrials Author: Fuller Wang Oct 30, 2020 05:57 AM (GMT+8)

As the leading supplier of EV batteries in China, CATL takes up around 50% of market share and kept a high profitability ratio in Q3 2020.

Image credit: Autohome.com

The world's largest supplier of electric-vehicle batteries, CATL, published its third-quarter financial reports: it achieved revenue of CNY 12.7 billion, up 0.8% year-on-year, and gained a net profit of CNY 1.42 billion, up 4.06% year-on-year. It is the first time in 2020 the revenue and net profit both grow within a quarter, largely owing to the less effect of COVID-19 and the recovery of sales of electric vehicles (EV). CATL's third-quarter report shows strong free cash flow as well. By the end of September, the company held CNY 66.44 billion, an increase of over 100% from the beginning of 2020. 

Meanwhile, CATL published an Assets Impairment Announcement and announced CNY 196 million asset impairment in total. It is generally believed CATL is hiding its profitability to keep a high bargaining power with downstream companies. This also indicates the potential profitability of CATL in the future.

From Q1 to Q3 2020, the CATL-installed capacity of power battery packs reached 16.75 GWh, taking nearly 50% of the Chinese power battery market, and marking it much larger than second-place company BYD (14.3%). By the fourth quarter, having started cooperation with Tesla, CATL is likely to achieve more sales and have an even better financial performance.