(Bloomberg) -- Contemporary Amperex Technology Co. Ltd., the world's biggest maker of electric-vehicle batteries and a key supplier to Tesla Inc., reported profit that beat analysts' estimates as rocketing sales overcame a spike in raw material costs.
Net income in the three months through September more than doubled from a year earlier to 3.27 billion yuan ($512 million), the Fujian, China-based company said late Wednesday. That beat analyst estimates of 2.61 billion yuan. Revenue grew to 29.3 billion yuan.
CATL's shares rose to a record high early Thursday, climbing as much as 3.3%. The stock has surged 79% this year on the back of deals to secure supplies and customers, and China's aggressive push into green energy and EVs. The major lithium-iron-phosphate battery supplier for Tesla's China-made models, CATL is expected to increase sales after Elon Musk's EV pioneer said it will shift to the cheaper battery for its standard range models to contain costs.
What Bloomberg Intelligence says:
CATL and BYD's battery businesses are set to get a long-term boost from China's accelerating EV transition. Global expansion may also be underway as automakers such as Tesla and VW warm to cheaper LFP batteries, production of which is dominated by Chinese manufacturers. - Steve Man
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The rally helped CATL become the most favored stock of Chinese fund managers for the first time in the third quarter, dislodging liquor maker Kweichow Moutai Co., which had held top spot for two years, Shanghai Securities News reported.
Rising commodity prices, including materials CATL uses in its batteries, have spurred fears over the impact of inflation on manufacturers. To soothe supply-chain constraints, CATL is seeking to be more active upstream and recently agreed to acquire Canada's Millennial Lithium Corp. to secure supplies of the key battery-making mineral.
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