CATL's capacity utilization was 83.4 percent in 2022, down from 95 percent in 2021.
CATL saw a solid performance in the fourth quarter, with its key businesses seeing strong growth.
The Chinese power battery giant achieved revenue of RMB 118.25 billion ($16.98 billion) in the fourth quarter, up 107.49 percent year-on-year and up 21.44 percent from the third quarter, according to its annual report released Thursday.
The company's net profit attributable to shareholders reached RMB 13.14 billion in the fourth quarter, up 60.64 percent year-on-year and up 39.49 percent from the third quarter.
CATL's gross margin further improved to 22.57 percent in the fourth quarter, up from 19.27 percent in the third quarter.
Previously, CATL's gross margin continued to decline in 2021, dropping to 14.48 percent in the first quarter of 2022 due to a large increase in battery raw material prices.
CATL's revenue for the full year 2022 was RMB 328.59 billion, up 152 percent year-on-year, and net profit was RMB 30.73 billion, up 92.89 percent year-on-year.
The company's gross margin in 2022 were 20.25 percent, a decrease of 6.03 percentage points from 2021.
CATL's revenue mainly comes from its power battery systems business, energy storage systems business and battery materials and recycling business.
Its power battery systems business generated revenue of RMB 236.6 billion in 2022, up 158.6 percent year-on-year, contributing 72 percent of the company's revenue.
CATL's actual battery systems capacity in 2022 was 390 GWh, up 128.9 percent year-on-year. It has 152 GWh of capacity under construction.
It had 325 GWh of battery system production in 2022, up 100 percent year-on-year, with full-year sales reaching 289 GWh, up 116.6 percent year-on-year.
It has a battery inventory of 70 GWh in 2022, up 75.2 percent year-on-year.
Notably, with rapid capacity expansion, CATL's capacity utilization rate was 83.4 percent in 2022, down from 95 percent in 2021.
CATL's energy storage systems business generated revenue of RMB 44.98 billion in 2022, up 230.16 percent year-on-year, contributing 13.69 percent of total revenue.
Its energy storage systems business saw a large decline in gross margin, which was 17 percent in 2022, 11.51 percentage points lower than in 2021, a much larger decline than other businesses.
This is because energy storage orders are mostly long-term orders, and compared to power batteries, energy storage batteries are more sensitive to price fluctuations, making it difficult to negotiate directly with customers for price increases in the short term.
CATL's battery materials and recycling business generated revenue of RMB 26.03 billion in 2022, up 94.7 percent year-on-year, contributing 7.92 percent of total revenue.
The battery materials and recycling business gross margin remained largely stable, declining only 2.36 percentage points to 21.23 percent in 2022.
Citi analyst Jack Shang said in a research note that CATL's reported results were in line with previous forecasts, and they are bullish on the company's strong pricing power and overseas customer channel as a leader in the battery industry.
Citi raised its earnings forecast for CATL by 4 percent for this year and 2 percent for next year to RMB 39 billion and RMB 49 billion, respectively, maintaining it as a top pick in the industry.
Citi expects CATL's battery sales could reach 402 GWh this year, up 39 percent year-on-year.
($1 = RMB 6.9648)
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