In-depth Breakdown of CATL: Business Model and Capital Returns

After-tax net profit from core operations continued to grow steadily, rising from RMB 31.8 billion in 2022 to RMB 67.7 billion in 2025—a cumulative increase of 112.8% over three years. (See Section 2.4) Adjusted working capital generated a massive cash release of RMB 22.5 billion in 2022, creating a high base for adjusted owner earnings that year—and leading to subsequent declines in later years. In 2025, another large-scale cash release of RMB 17.7 billion occurred. (See Section 2.5) 2.4 Dual Growth in Revenue and Gross Margin, Plus Scale Effects in Operating Expenses, Driving After-Tax Net Profit After-tax net profit from core operations = Revenue × Composite Gross Margin − Operating Expenses − Taxes 2.4.1 Core Business—Revenue and Gross Profit Trends in Power Battery Systems Power battery systems constitute the company’s core business. From 2022 to 2025, global new-energy vehicle (NEV) sales surged, with China—the world’s largest market—serving as the primary growth engine. In 2025, China’s market growth slowed, while Europe—the second-largest global market—entered a phase of high growth. Leveraging its position as the world’s top brand and largest-scale player, along with continuous refinement of its product portfolio, the company achieved a 124% volume growth in power battery sales. Meanwhile, battery selling prices continued to decline. First, lithium carbonate prices fell sharply—from approximately RMB 500,000 per ton at the start of 2023 to around RMB 100,000 per ton by year-end, and further down to an average of about RMB 75,500 per ton in 2025—triggering downward adjustments in metal-linked pricing mechanisms. Second, battery production capacity expanded faster than demand, resulting in overcapacity and intense industry-wide price competition. Under the dual impact of rising volumes and falling prices, revenue in this segment grew by 34% from 2022 to 2025. Gross margin rose significantly from 17.2% in 2022 to 22.3% in 2023, and then further climbed above 23%. This improvement stemmed partly from falling lithium carbonate prices and partly from the company’s product mix optimization and improved capacity utilization—which lowered unit costs through economies of scale. 2.4.2 Second Growth Engine—Revenue and Gross Profit Trends in Energy Storage Systems Energy storage systems represent the company’s second growth engine. From 2022 to 2025, deepening global energy transition and intensified national policy support for energy storage spurred explosive demand. Leveraging its world-leading brand strength, scale advantages, and continuously refined product portfolio, the company achieved a 157% volume growth in energy storage system sales. Like power batteries, energy storage cells were similarly affected by falling lithium carbonate prices and overcapacity, driving continuous price declines. Compared with power batteries, energy storage cells are highly standardized, intensifying price competition even further. Under the dual impact of rising volumes and falling prices, revenue in this segment grew by 39% from 2022 to 2025. Gross margin jumped from 17% in 2022 to 23.8% in 2023, and then further rose above 26%, driven both by lower lithium carbonate prices and by the company’s product mix upgrades. In 2025, the company began extending downstream along the value chain into integrated solutions; corresponding financial contributions became visible in the segment’s performance during the first half of 2026. 2.4.3 Scale Effects in the Three Operating Expenses The combined ratio of the three operating expenses (selling, general & administrative, and R&D) declined from 10.2% in 2022 to 8.9% in 2025, signaling the emergence of clear scale effects.

"The Six Major Oil Majors Earned RMB 5 Billion Daily in the First Half of the Year, with Combined Profits Reaching USD 135.6 Billion"

This windfall was no accident—it resulted from the simultaneous convergence of three powerful forces. First Engine: Soaring Oil Prices. Ongoing Middle East conflicts continued to disrupt global supply chains. Following the outbreak of U.S.-Iran tensions, navigation through the Strait of Hormuz—the conduit for nearly 20% of global crude oil shipments—was impeded. Saudi Aramco’s output dropped sharply by 25% quarter-on-quarter to 9.46 million barrels of oil equivalent per day—the steepest decline among the six majors. While output fell, oil prices surged: Brent crude’s average price in Q2 rose substantially compared to Q1. Lower output coupled with higher prices delivered outsized profits to oil companies. Second Engine: Output Expansion. The broad-based profit surge reflected a competitive race centered on asset quality. ExxonMobil’s upstream production hit a 20-year high, with Permian Basin output exceeding 1.8 million barrels per day. Chevron benefited from acquisitions—including Hess assets—and increased Permian Basin output, achieving a record-high upstream oil and gas production; its Q2 output rose 20% year-on-year. High-quality fields have now entered a phase of explosive output growth. Third Engine: Refining Windfalls. Russia’s loss of refining capacity, supply disruptions in the Middle East, tight feedstock availability for Asian refineries, and historically low global inventories have pushed global refining margins to record highs. Chevron’s refineries set a new daily crude processing record of 1.07 million barrels, with capacity utilization exceeding 97%. TotalEnergies’ refining and chemicals division posted adjusted net operating profit of USD 3.4 billion in the first half—nearly five times higher year-on-year. Shell’s Q2 refining margin rose 41% sequentially to USD 24 per barrel, while its chemicals and products division posted its strongest adjusted earnings since Q3 2021. These extraordinary refining profits contributed substantial incremental gains for the oil majors. With all three engines firing simultaneously, the six giants’ profits soared to historic levels. III. From “Transition Pioneers” Back to “Capital Discipline” During this high-oil-price cycle, strategic priorities among oil majors are undergoing profound shifts. European energy firms, having borne greater pressure to decarbonize in recent years, previously pledged to cut oil-and-gas investments and massively expand into new energy. Reality, however, has intervened: new-energy projects deliver low returns, and energy security concerns have re-emerged. Over the past two years, European firms have clearly pivoted—shifting away from being “energy transition pioneers” toward prioritizing “capital discipline.” BP’s newly appointed CEO Meg O’Neill explicitly stated that the company has made significant progress strengthening its balance sheet. BP has been highly active recently: it sold its Gelsenkirchen refinery, agreed to divest its Austrian retail business, announced plans to sell its UK North Sea assets, and intends to offload its U.S. biogas business, Archaea. According to the Financial Times, BP is in advanced negotiations with a consortium backed by Kuwait’s sovereign wealth fund to sell Lightsource—the company’s solar business—in order to refocus resources on higher-returning oil and gas operations. Shell, too, is pursuing major M&A and asset disposals. On July 15, Shell announced a USD 16.4 billion acquisition of Canadian ARC Resources—the largest deal since 2015—aimed at reinforcing its leadership in Canadian LNG and shale gas. Simultaneously, Shell sold its network of over 2,000 Jiffy Lube quick-lube outlets for USD 1.3 billion, and divested its Indian renewable energy platform Sprng Energy for USD 1.8 billion.

FirstEnergy's Quarterly Profit Rises on Higher Rates, Data-Center Demand

Apr 28, 2026

FirstEnergy reported a 12.5% rise in Q1 profit driven by higher rates and data center demand, while reaffirming a $6 billion 2026 capital investment plan for grid modernization.

reuters

2025-11-12

Brenntag’s Earnings Decline, More Restructuring Planned

2026-01-07

Brenntag expands collaboration with Women in Chemicals

2026-01-28

Brenntag expands Givaudan beauty ingredients distribution deal to Malaysia and Singapore

2026-02-24

Toyobo posts substantial surge in profit

2026-02-26

Brenntag signs distribution deal with Brazil’s Nanum