Earned 36 billion in profits, the "big brother" CATL, handed in the answer sheet.

The intense competition in the photovoltaic and energy storage industries has left every company in the sector struggling.

To end this cutthroat competition, the Photovoltaic Association has repeatedly called for an end to price wars. Of course, we believe that under full market competition, the photovoltaic industry has already hit rock bottom.

Currently, only leading photovoltaic companies can expand against the trend, while small and medium-sized enterprises have completely halted their expansion plans. Some argue that due to the supply-demand imbalance causing sharp price declines, the entire industry is now operating at a loss. New capacity deployments across the photovoltaic supply chain have largely paused. Although total supply remains excessive, dynamic production and sales are nearing equilibrium, leaving limited room for further declines in industry sentiment. Profits across the supply chain are expected to marginally recover starting in 2025.

Therefore, from this perspective, the winter for the photovoltaic and energy storage industries is nearing its end.

On the evening of October 18, CATL, the "top player" in power batteries, released its Q3 2024 financial report. The report showed that the company achieved revenue of 259.045 billion yuan in the first three quarters, a year-on-year decrease of 12.09%; net profit reached 36.001 billion yuan, up 15.59% year-on-year; and non-GAAP net profit was 32.176 billion yuan, an increase of 19.26% year-on-year.

Judging from the financial data, the decline in revenue due to industry competition seems inevitable. However, compared to other companies, CATL's performance is actually not too bad.

Recently, with the stock market boom, CATL, as a heavyweight stock, has also performed "insanely" well.

Statistics show that from its lowest point in February this year to its peak, its stock price surged by over 110%. Year-to-date, its gain exceeds 60%, while the ChiNext Index has only risen by 16.8%. In other words, CATL's stock has significantly outperformed the market this year. Moreover, CATL has once again surpassed the trillion-yuan mark, with its latest market cap reaching 1.12 trillion yuan.

So, why has CATL's stock performed so strongly despite declining profit growth and even negative revenue growth?

Kan Jian Finance believes that CATL's declining performance is mainly due to price wars and slowing global demand. However, in terms of market share, CATL has not contracted.

According to the financial report, domestically, CATL's power battery installation volume accounted for 45.9% of the market share from January to September this year, up 3.1 percentage points year-on-year, ranking first.

Globally, data from South Korean research firm SNE Research shows that CATL's global power battery installation volume reached 189.2GWh in the first eight months of this year, a year-on-year increase of 27.2%.

In other words, CATL's market share has not declined in either domestic or international markets but has instead grown.

Specifically, in Q3, CATL's revenue was 92.278 billion yuan, down 12.48% year-on-year; net profit attributable to shareholders was 13.136 billion yuan, up 25.97% year-on-year, demonstrating strong profitability.

It is also worth noting that in Q3 this year, CATL recorded significant asset impairments. On the evening of the earnings release, CATL also issued an "Announcement on Impairment Provisions for the First Three Quarters of 2024," which showed that the company had set aside a total of 7.543 billion yuan in credit and asset impairment provisions for the first three quarters. This included 887 million yuan in bad debt provisions for receivables, 1.431 billion yuan in inventory write-downs, over 2.6 billion yuan in fixed asset impairments, and over 2 billion yuan in intangible asset impairments.

Compared to the interim report, CATL's Q3 fixed asset impairment losses increased by 1.88 billion yuan, and intangible asset impairment provisions rose by over 2 billion yuan.

Additionally, CATL's gross margin in Q3 rose to 31.17%, which is a positive sign.

CATL stated that the increase in gross margin was mainly due to falling prices of materials like lithium carbonate. Moreover, products such as the Shenxing Superfast Charging Battery and Kirin Battery have gained recognition from mainstream clients, with new technologies and products contributing positively to the gross margin.

From a broader market perspective, although price wars have significantly impacted corporate revenues, as an industry leader, CATL has strong overall competitiveness and pricing power. As industry consolidation intensifies, leading companies like CATL will further demonstrate their advantages.

Thus, we believe the market has already priced in the impact of CATL's declining performance. With improving future expectations, CATL is poised to reach even greater heights.