Contemporary Amperex Technology Co. Limited (CATL) reported a 49% surge in first-quarter net profit, reaching RMB20.7 billion as battery shipments accelerated to meet robust demand.
Management highlighted strong orders in April and May, projecting that capacity utilization would remain at a high level of 85% to 90% through the second quarter of 2026. The results, which beat market expectations, represented 23% of full-year forecasts from both UBS and the broader market.
The profit figure marked a 10% decline from the previous quarter, a drop attributed to seasonal factors. Excluding non-recurring items, net profit for the quarter stood at RMB18.1 billion, an increase of 53% from the same period a year earlier. While the company did not proactively adjust prices in the first quarter, management cautioned that gross margins in the second quarter could decline year-over-year due to rising commodity costs and a high base effect, though most raw material cost changes can be passed through.
In response to the strong results, UBS Research reiterated its Buy rating on CATL’s A-shares (300750.SZ) and a price target of RMB500. The company’s Hong Kong-listed shares (03750.HK) rallied 7.6% following the announcement.
The strong earnings from the world's largest battery manufacturer signal sustained momentum in the electric vehicle supply chain. Investors will now look to the company's "Super Tech Day" on April 21st for more details on its next-generation battery products and ecosystem strategy.
This article is for informational purposes only and does not constitute investment advice.
