Ningde Times, the leading power battery manufacturer in China, recently released its financial report for the third quarter of 2024. The company reported a quarterly revenue of 92.28 billion yuan (approximately $12.99 billion), marking a year-over-year decline of over 12%. However, net profit saw a significant increase of nearly 26%, reaching 13.14 billion yuan, the second-highest quarterly profit in its history, with daily earnings surpassing 140 million yuan.
This marks the sixth consecutive quarter that Ningde Times has exceeded 10 billion yuan in net profits. The profit level for Q3 this year is only second to the fourth quarter of 2022, making it the second highest profit recorded to date. For the first three quarters of this year, the company reported total revenues of 259 billion yuan, a year-over-year decrease of 12%, but net profits rose by 15.6%, totaling 36 billion yuan.
According to Jiemian News, the past four quarters have seen Ningde Times experience double-digit declines in revenue, primarily due to lower selling prices of battery products. Yet, thanks to a continuous increase in gross margin, the company has been able to maintain net profits exceeding 10 billion yuan per quarter despite the revenue dip.
Ningde Times operates across four main segments: power batteries, energy storage batteries, battery materials and recycling, as well as mineral resources. Notably, the combined revenue from power and energy storage batteries accounts for about 85% of its total income.
During an earnings communication meeting held in July, Ningde Times indicated that the decline in unit selling prices for its battery products was influenced by decreasing costs of resources and raw materials, including lithium carbonate.
Nonetheless, the financial report revealed that the company’s gross margin reached 31.17% in Q3, its highest since Q4 2018. Ningde Times attributed this increase to a greater decrease in costs compared to the drop in product prices, along with enhanced profitability from new products.
The company has launched new battery models, the Kirin battery and the Shenxing battery, which are now being mass-produced in over 30 mainstream vehicle models in China. These two models are expected to account for 30% to 40% of the company’s power battery shipments this year, with projections to rise to 70% to 80% next year. The Kirin battery targets the high-end passenger car market, while the Shenxing battery focuses on cost-performance passenger vehicles, both of which were introduced in 2022 and 2023 respectively.
