In 2022, CATL’s total operating revenue exceeded the 300 billion yuan mark for the first time, reaching 328.594 billion yuan, a year-on-year increase of 152.07%. The full-year net profit was 30.7 billion yuan, a significant year-on-year increase of 93%.

From the perspective of macro data, CATL’s data is still eye-catching, and it continues to maintain high growth in revenue and profits. At the same time, Ningde Times also proposed a generous dividend plan. It plans to distribute a cash dividend of 25.2 yuan (tax included) to all shareholders for every 10 shares, with a total cash dividend of 6.155 billion yuan; it will increase the capital reserve fund by 8 shares for every 10 shares. This move is undoubtedly It can also enhance investor confidence.

According to SNE data, CATL’s global power battery usage market share is 37.0% in 2022, ranking first in the world for 6 consecutive years; global energy storage battery shipments market share is 43.4%, ranking 2 consecutive years Ranked first in the world.

In terms of products, CATL revealed in a conference call that it has also signed an agreement with BMW for cylindrical products, but the company believes that prismatic batteries are still a better solution.

No matter in terms of revenue, profit, customers, etc., CATL’s leading position remains stable.

01

Gross profit dropped sharply year-on-year, and battery prices rose for the first time

Even behind such impressive performance, CATL is still suffering from an unusually large gross profit. reduction, resulting in loss of profits.

In 2022, the gross profit margins of CATL’s power batteries and energy storage batteries will drop significantly from 22% and 28% in 2021 to 17% respectively.

It can be seen that despite the sharp increase in raw materials, CATL's profits have suffered without exception. Compared with previous years, the gross profit margin and net profit margin levels are significantly different in both absolute value and decline. .

Data source: Compiled based on annual report

Under the mechanism of metal linkage, the increase in upstream costs is eventually transmitted to the price level of the battery system. In 2022, CATL ended the downward trend of battery system selling prices, and terminal selling prices rose for the first time. In 2022, the average selling price of power battery systems will increase from 0.78 yuan/Wh in 2021 to 0.98 yuan/Wh.

Data source: Compiled based on annual report

However, fortunately, CATL has strong bargaining power both upstream and downstream, and the profit loss is still within the tolerable range. Also extensively restored through scale.

As for the future direction of its gross profit margin, in the conference call, CATL said that the overall expectation will be better than that in 2022, and the downward trend of raw materials will bring more initiative to the company.

02

Insufficient upstream layout of lithium mines

In 2022, battery mineral resource revenue appeared for the first time in the CATL annual report, amounting to 4.5 billion yuan, a year-on-year increase increased by 116%, but accounted for only 1.37% of revenue.

This shows that mineral resources have not provided strong support to CATL. Even if it is as strong as CATL, its investment in the mining field is still slightly insufficient.

However, in recent years, CATL has invested in shares, technology empowerment, etc., to cooperate with high-quality suppliers in important upstream links such as cathode materials, anode materials, separators, electrolytes and other materials and equipment. In-depth cooperation ensures safe supply of important raw materials and equipment and controllable costs.

In terms of lithium resources, CATL has made breakthrough progress in the lithium-containing porcelain clay mine project in Yichun, Jiangxi, the Snowy hard rock lithium mine project in Sichuan, and the Bolivian Salt Lake Operation Project.

In terms of nickel resources, CATL and its partners in Indonesia are jointly investing in and building a full industry chain project from laterite nickel mining, smelting, ternary materials to batteries, which is progressing in an orderly manner; in phosphorus In terms of resources, CATL has also obtained the mining license for the Daping phosphate mine project in Guizhou.

The layout of some minerals of CATL

Source: Compilation of online data

It is reported that CATL is also working hard to find lithium mines in Africa.

In any case, CATL already has a certain amount of resource reserves; through battery recycling, it is also building a self-circulating supply chain closed loop.

Of course, with the fall in lithium prices, the difficult profit decline stage is passing, and battery prices are entering a downward trajectory.

03

Production capacity and R&D are growing rapidly

Leading scale and R&D investment are constantly consolidating the moat of the CATL era.

(1) The scale of production and sales continues to expand

In 2022, CATL’s lithium-ion battery production capacity will reach 390GWh, output will reach 325GWh, and sales will be 289GWh, of which power battery system sales will be 242GWh, with production capacity , output and sales have doubled, while the production and sales rate has also continued to increase.

CATL’s production capacity and output (GWh)

Data source: Compiled based on annual report

In addition, the scale of CATL’s production capacity under construction is still growing, driven by From 140GWh in 2021, it will be increased to 152GWh in 2022. This shows that CATL’s production capacity layout at home and abroad is still improving.

CATL has a large number of high-quality customers.

In terms of power batteries, overseas, CATL has deepened global cooperation with Tesla, BMW, Daimler, Stellantis, VW, Ford, Hyundai, Honda and other car companies; domestically, it has cooperated with SAIC, Geely, NIO, Ideal, Yutong and other car companies. Strengthen cooperative relationships.

CATL is building its second factory in Europe in Hungary, with a planned production capacity of 100GWh, to further improve its global strategic layout and help accelerate Europe's electrification and energy transformation.

As for people’s concern about cooperation with Ford, CATL said that the specific method of cooperation with Ford is still under negotiation and is currently being implemented smoothly.

CATL also revealed that the company’s overseas cooperation method is not the only one, and there will be new methods in the future.

In terms of energy storage batteries, CATL is also increasing customer coverage in all aspects. Overseas, it has conducted in-depth cooperation with leading customers in the global new energy industry such as Tesla, Fluence, W?rtsil?, Flexgen, Sungrow, and Hyosung. Multi-regional and multi-field business cooperation; domestically, it has cooperated with China Energy Group, State Power Investment Group, China Huaneng, China Huadian, China General Nuclear Power Group, China Three Gorges Corporation, China Energy Construction Group, etc. in the field of new energy strategic agreement.

In terms of medium-sized batteries, CATL and ATL established a joint venture to promote the development of market segments such as home storage, industrial and commercial energy storage, electric two-wheelers, drones, and power tools.

In addition, CATL has promoted integrated innovation in multiple market application scenarios, covering smart mines, battery replacement services, optical storage charging and inspection, smart ports, electric ships and other fields.

These customers and businesses are widely distributed, laying the foundation for the sustained and stable development of CATL.

(2) R&D investment is still doubling

In terms of R&D, CATL, which is expanding in scale, has not relaxed its investment in R&D. In 2022, CATL's R&D investment will reach 15.5 billion yuan, doubling year-on-year.

As of the end of 2022, CATL has 16,322 R&D technicians, including 264 with doctoral degrees and 2,852 with master's degrees.

Large-scale R&D investment has resulted in technological leadership. Currently, Ningde Times has 5,518 domestic patents and 1,065 overseas patents, and a total of 10,054 domestic and overseas patents are being applied for.

Data source: Compiled based on annual report

Now, CATL has achieved breakthroughs in sodium-ion batteries, Kirin batteries, condensed matter batteries and other products, and CATL is promoting sodium-ion batteries. Industrialization will be achieved in 2023, and condensed matter battery products are also being discussed with customers for cooperation.

CATL also revealed that both sodium power and M3P will achieve mass production and delivery this year, but the quantity will depend on customer demand.

At present, CATL’s leading position remains the same. The large scale of production and sales and investment in R&D have helped CATL maintain its leading position in the industry and also played a role in safeguarding medium- and long-term development.

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