CATL Achieves Over 50 Billion Yuan in Net Profit Last Year, Plans to Invest Up to 40 Billion Yuan in Wealth Management
On March 14, CATL (300750.SZ), a leading power battery manufacturer in the A-share market, released its annual report for 2024. The financial report indicates that CATL achieved an operating revenue of 362.01 billion yuan, a decrease of 9.7% year-on-year. The company reported a net profit attributable to shareholders of 50.75 billion yuan, which is an increase of 15.01% compared to the previous year, averaging 139 million yuan in daily earnings. The net profit after deducting non-recurring items was 44.99 billion yuan, reflecting a year-on-year growth of 12.23%.
In 2024, CATL found itself in a situation where it was “increasing profits without increasing revenue.” According to the report, the operating revenues from its four business segments—power batteries, energy storage batteries, battery materials and recycling, and battery raw materials—decreased year-on-year. Among these, only the energy storage battery segment experienced a single-digit decline, while the other segments saw drops exceeding 10%.
Despite the decline in revenue, CATL has improved its profit management. The company plans to distribute a cash dividend of 45.53 yuan (including tax) for every 10 shares to all shareholders, with the total cash dividends and share buybacks for 2024 amounting to 26.58 billion yuan, which accounts for 52.38% of the net profit attributable to shareholders in the consolidated financial statements for the year.
Alongside the annual report, CATL announced that it intends to utilize up to 40 billion yuan of its idle funds for entrusted wealth management in 2025.
Energy Storage Batteries Become a Key Business Pillar
In 2024, CATL sold 475 GWh of lithium-ion batteries, representing a year-on-year increase of 21.79%. This included 381 GWh of power battery systems, with a growth of 18.85%, and 93 GWh of energy storage battery systems, which saw a remarkable increase of 34.32%. The company noted that the ongoing growth in the industry was a key driver of its performance. According to SNE Research, global sales of new energy vehicles reached 17.63 million units in 2024, marking a 26.1% increase, while the global usage of power batteries reached 894.4 GWh, up 27.2%. Global shipments of energy storage batteries reached 301 GWh, a significant jump of 62.7%.
Data shows that the growth rate of CATL’s energy storage batteries has surpassed that of power batteries, making it an essential pillar of the business, with a gross profit margin that also exceeds that of power batteries. The gross profit margin for power battery systems in 2024 was 23.94%, up 5.81% year-on-year, while the gross profit margin for energy storage battery systems was 26.84%, an increase of 8.19%.
The capacity utilization rate for battery systems was 76.33%.
CATL mentioned in its report that it launched the Shenxing Plus battery, based on the previously released Shenxing 4C supercharging battery, which achieves a system energy density exceeding 200 Wh/kg. This makes it the world’s first lithium iron phosphate battery featuring both 1000 km range and 4C supercharging capabilities. Additionally, CATL introduced the next-generation Qilin high-power battery, with a discharge power exceeding 1300 kW, which can help new energy vehicles achieve a 0 to 100 km/h acceleration in under 2 seconds. The company also launched the world’s first pure electric hybrid battery with a range exceeding 400 km while providing 4C supercharging capability, addressing the slow charging efficiency shortcomings of hybrid models.
According to forecasts from Dongwu Securities, with the release of the new Qilin products, the expected profit per watt-hour is anticipated to remain above 0.1 yuan, maintaining a competitive edge against domestic second and third-tier firms while expanding its lead over international battery manufacturers.
Furthermore, CATL has set aside a total of 9.296 billion yuan for impairment losses, which corresponds to a reduction of 8.391 billion yuan in net profit attributable to shareholders for 2024. “Impairment is normal for such scale assets, but its impact on profits should not be underestimated,” noted a private equity fund expert closely monitoring CATL.
International Revenue Declines Year-on-Year
In addition to changes in its business, CATL has been active in international markets. The financial report states that the company’s overseas revenue was 110.34 billion yuan in 2024, a decline of 15.77% year-on-year, accounting for 30.48% of total revenue. “The operating environment in major business regions has not changed significantly, and payment collections from overseas clients are normal,” CATL stated in its report.
In terms of overseas projects, the battery supply chain project in Indonesia and the new energy battery industrial base project in Hungary are both under construction. Although CATL has been progressing smoothly in the European market, its advancement in the U.S. market has faced challenges. On March 10, the U.S. House of Representatives unanimously passed bill H.R.1166, which prohibits the Department of Homeland Security from purchasing batteries from six Chinese companies, including CATL, BYD, Envision Energy, EVE Energy, Hicharge Energy, and Guoxuan High-Tech.
Market news suggests that Ford is advancing its technology licensing agreement (LRS) with CATL, with equipment procurement starting in 2024 and cathode material contracts confirmed by January 2025. Moreover, CATL is also in discussions with General Motors, Tesla, and ESS clients in the U.S. and EU regarding LRS business. Notably, CATL did not provide detailed explanations about the LRS business in its financial report but mentioned comprehensive cooperation with clients through shareholding, joint ventures, and technology licensing.
Historically, CATL has shown a keen interest in investing in both upstream and downstream sectors of the industry, creating significant alliances. According to the financial report, CATL has invested in companies such as Luoyang Molybdenum (603993.SH), Hunan Yunan (301358.SZ), Xi’an Intelligent (300450.SZ), ZK (ZK.NYSE), MDKA (MDKA.IDX), DIDIY (DIDIY.OTC), Horizon Robotics (09660.HK), Liqin Resources (02245.HK), Yongfu Co. (300712.SZ), and Risen Technology (688531.SH), with a total investment cost of 34.62 billion yuan.
Currently, CATL is preparing for a listing on the Hong Kong Stock Exchange. According to previous reports, CATL aims to raise at least 5 billion USD through its Hong Kong listing. The company has indicated that the funds raised will primarily be used for expanding overseas capacity, international business development, and supplementing operational funds abroad, supporting its long-term international strategy.
It is noteworthy that on the same day CATL disclosed its performance, multiple announcements included a financing announcement. The announcement indicated that, due to the need for business development, the company plans to issue overseas bonds totaling no more than 1.5 billion USD (including 1.5 billion USD) or equivalent amounts in other currencies through existing or newly established wholly-owned subsidiaries, with the company providing relevant guarantees for the issuance of these overseas bonds. “Given that the company is currently in a critical phase of rapidly expanding and laying out its overseas business, with the Germany Thuringia factory still in the ramp-up phase, and the Hungarian factory, joint venture factory in Spain with Stellantis, and the Indonesian battery supply chain project still under construction or in planning, there is a significant demand for overseas funds,” CATL stated.
According to reports, CATL previously issued a total of 2 billion USD in overseas bonds through its wholly-owned subsidiaries between 2020 and 2021, primarily for investment in the construction of the Thuringia factory project in Germany, with 1.5 billion USD of these bonds set to mature between 2025 and 2026.
