CATL Posts Record Half-Year Results While Pivoting to Hydropower and AI Data Centers
Published on 07/25/2026 at 17:53 | Redaktion boerse-global.de
CATL has delivered a financial performance that outstripped even the most bullish analyst forecasts, but the market's muted response suggests investors are already looking past the headline numbers to the company's sprawling capital deployment strategy.
The battery giant reported first-half 2026 revenue of 276.917 billion yuan, a 54.8 percent surge from the prior-year period. Net profit climbed 41.98 percent to 43.284 billion yuan, with diluted earnings per share reaching 9.51 yuan. The second quarter alone generated net income of 22.5 billion yuan, up 36.5 percent year-on-year and comfortably above the 29.7 percent growth analysts had penciled in. Quarterly revenue hit a record 147.8 billion yuan, a 56.9 percent increase.
Yet beneath those top-line records, the growth trajectory is cooling. The second quarter marked the weakest quarterly expansion in over a year, and revenue narrowly missed analyst estimates. More tellingly, margins are coming under pressure. The gross margin for energy storage batteries slipped from 25.5 percent to 24.0 percent in the first half, while the core EV battery segment — still CATL's largest business — saw its margin contract 1.8 percentage points to 20.6 percent. The company's overall gross margin stood at 23.93 percent, with return on equity at 11.41 percent.
Storage Emerges as the Growth Engine
The EV battery division remains the revenue heavyweight at 192.12 billion yuan, up 46.02 percent. But it was the energy storage segment that stole the show, with sales jumping 87.54 percent to 53.26 billion yuan. Storage's share of half-year revenue has climbed from 16 percent to 19 percent, and CATL now explicitly identifies stationary storage — particularly demand from AI data centers — as its primary growth driver. The company expects storage to account for roughly half of global sales by 2030.
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That ambition is backed by serious capital. CATL has invested 4.1 billion yuan for a 49 percent stake in Zhongheng Electric, is reportedly spending around $942 million for a 38.1 percent interest in data center operator VNET, and has plowed approximately 5 billion yuan into an investment in DeepSeek. A newly announced partnership with Haibo Storage covers 60 gigawatt-hours of sodium-ion storage technology, and the company has unveiled a new sodium-ion cell purpose-built for grid storage.
On the global stage, CATL's dominance is widening. Between January and May, it held a 40.2 percent share of the vehicle battery market, up 2.2 percentage points. In China, its share of batteries installed in passenger cars rose to 46.7 percent, while overseas it reached 33.7 percent. The company has now led the world in energy storage shipments for five consecutive years. Production capacity hit 525 gigawatt-hours with a utilization rate of 94.86 percent, and another 764 gigawatt-hours are under construction.
A Surprising Bet on Hydropower
In a move that has little to do with batteries, CATL announced plans to build a hydropower station in Sichuan province at a cost of 33.4 billion yuan. The company is forming a joint venture with a subsidiary of state-owned SDIC Power Holdings, in which it will hold a 10 percent stake. The facility is designed to generate 2.4 gigawatts of installed capacity and produce 8.65 billion kilowatt-hours annually — though operations are not expected to begin until 2035.
The project signals CATL's ambition to push beyond cell manufacturing into adjacent energy infrastructure, complementing its storage push. But with first revenues a decade away, the near-term payoff is unclear, and investors will be watching how the company balances these long-term bets against the immediate pressures in its core EV market.
In China, CATL is losing ground to competitors. Its domestic market share slipped to 42.70 percent in June, a decline of 3.43 percentage points from May, while BYD held 18.49 percent. Weakening EV demand in the country appears to be weighing more heavily on the company than the tailwinds from the storage boom.
Record Buyback and Higher Payout
Alongside the results, CATL unveiled the largest share buyback ever undertaken by an A-share company, ranging from 20 billion to 40 billion yuan. The maximum price is set at 573 yuan per share, a roughly 49.6 percent premium to Friday's closing price of 383.01 yuan. The repurchased shares will be cancelled, directly reducing the outstanding count. The plan requires shareholder approval and is expected to be executed within 12 months.
The buyback is backed by formidable cash generation. Operating cash flow reached 60.217 billion yuan in the first half, and the company held 372.053 billion yuan in liquid assets. The debt-to-asset ratio stood at 63.65 percent. Chinese financial media noted that the buyback could consume up to 92 percent of half-year profit and roughly 66 percent of operating cash flow — a signal that CATL retains significant financial firepower despite its aggressive investment program.
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The board has also proposed an interim dividend of 14.11 yuan per 10 shares, totaling 6.493 billion yuan.
Market Reaction: All Eyes on Execution
The stock closed Friday at 383.01 yuan, down 0.77 percent on the day. Over 12 months, the shares have gained 34.78 percent, but they remain 18.29 percent below the 52-week high of 468.75 yuan reached in May. The 14-day relative strength index of 51 points to neutral sentiment.
Investors appear to have already priced in the strong operational performance and are now focused on execution risk. The two big questions hanging over CATL are how quickly the storage business can compensate for the slowing EV segment in China, and whether the company's unconventional foray into hydropower — with its decade-long payoff horizon — will prove a distraction or a strategic masterstroke.
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