CONTEMPORARY Amperex Technology Co., the world’s biggest maker of electric vehicle batteries, plunged Thursday after the firm’s first-quarter profit sharply missed estimates.

Shares of the Shenzhen-listed firm, widely known as CATL, fell as much as 13.77% early Thursday to 353 yuan (US$53.42) before recouping some of the losses to end the session down 8.15%.

CATL had delayed the release of its first-quarter financial results by a couple of days.

CATL’s net income fell 24% to 1.49 billion yuan for the first three months of the year while underlying profit dropped 41% to 977 million yuan.

CATL attributed the decline in profit to higher operating costs, thanks to the rise in prices of raw materials.

Analysts from global investment banks said CATL’s results missed market expectations, with analysts from Japanese investment bank Nomura writing in a note that the earnings decline was “worse than the market expectation.”

Although analysts cut their target price for CATL shares, they kept their buy rating, partly due to expectations the company will be able to adapt to higher costs, the adoption rate for electric vehicles in China will rise and battery shipments should pick up in the second half of the year.

Data from the China Automotive Battery Innovation Alliance showed that the number of batteries installed in electric vehicles in China more than doubled in the first quarter.

Shares in CATL, which supplies batteries to carmakers including Tesla Inc. and Nio Inc., had been down around 36% this year as of Thursday.

The firm commands a global market share of about 35%, with South Korea’s LG Energy Solution trailing at 15.9%.

CATL’s market share in China, the world’s biggest market for electric cars, was 49.8% in the first quarter of 2022, down 4.2 percentage points from the end of last year, as carmakers sought to diversify battery suppliers, according to Fitch Ratings Inc. (SD News)