Faced with the dual challenges of market changes and intensified competition, "King of Ning", which had experienced rapid development, has temporarily pressed the "pause button".

recently,CATLThe performance report for the first half of 2024 was released, and for CATL, it was a mixed report card.

During the reporting period, although net profit achieved a year-on-year growth, showing a steady improvement in the company's profitability; total operating revenue declined. This is the third consecutive quarter that CATL's year-on-year revenue has shown a downward trend.

With the fluctuations in performance and changes in market sentiment, CATL's stock price has also experienced a roller coaster ride.

As of the close of August 2, CATL's share price was 177.09 yuan per share, with a total market value of 779 billion yuan, which was half of its previous peak of 1.58 trillion yuan.

Facing the challenges of the market, finding new growth points and competitive advantages has become CATL's top priority. This not only requires it to increase R&D investment, promote technological innovation, and enhance product competitiveness, but also requires CATL to expand into new market areas to increase the market coverage of its products.

The “ceiling” of “Prince Ning”?

On the evening of July 26, CATL, known as the "King of Ning", released a 2024 semi-annual report that was within expectations.

The financial report shows that in the first half of 2024, CATL achieved a total operating revenue of 166.77 billion yuan, a year-on-year decrease of 11.88%; the net profit attributable to shareholders of the listed company was 22.87 billion yuan, a year-on-year increase of 10.37%.

The reason why it is "within expectations" is that in the second quarter of 2024, CATL continued its ability to make money with a net profit of over 10 billion yuan in the previous four quarters, and the net profit attributable to the parent company reached 12.36 billion yuan. This is also the confidence for its year-on-year profit growth in the first half of the year.

But at the same time, this did not change CATL's "increased profits but not increased revenues."

Specifically, CATL's total revenue in the second quarter was 87.029 billion yuan, down 13.11% year-on-year, causing CATL's revenue to decline year-on-year in the first two quarters of this year.

In fact, since the third quarter of 2022, CATL's revenue growth has slowed down significantly. By the third quarter of last year, the year-on-year growth rate had dropped from 186.72% to 40.10%.

This is not the worst stage.

In the fourth quarter of last year, CATL's quarterly revenue fell by more than 10% year-on-year, a rare occurrence. In the first quarter of this year, the decline continued to increase to 10.41%.

This makes the second quarter of this year the third quarter in which CATL's total revenue has declined year-on-year.

Founded in 2011, CATL has achieved rapid growth in performance due to its investment in power batteries, as the domestic new energy industry has grown at an unusually fast pace. In particular, it has achieved double-digit growth in 2021 and 2022.

According to the financial report disclosed by CATL, in 2021 and 2022, the company achieved operating income of RMB 130.356 billion and RMB 328.59 billion, respectively, a year-on-year increase of 159.06% and 152.07%, respectively; the net profit attributable to shareholders of listed companies was RMB 15.931 billion and RMB 30.729 billion, respectively, a year-on-year increase of 185.34% and 92.89%.

It is worth emphasizing that during the years of CATL's rapid development, its maximum quarterly revenue growth even reached 186.72% at one point.

By 2023, although CATL's operating income exceeded the 400 billion yuan mark for the first time, reaching 400.9 billion yuan at one point, the year-on-year growth rate slowed significantly to 22.01%; and the full-year net profit of 44.1 billion yuan, although still far ahead in the industry, the year-on-year growth rate has been "halved" to 43.58%.

The market has changed and the competitors have become stronger?

"As a midstream industry, CATL's revenue and profits are affected by both the upstream and downstream industries. Therefore, it is not surprising that its performance growth has slowed down or even declined," an industry insider who has been paying close attention to the secondary market told Phoenix WEEKLY Finance.

As the above-mentioned person said, first of all, the installed share of new energy passenger car batteries has declined, which has a great impact on CATL's performance.

Compared with the most glorious "Ning Wang era", the current new energy vehicle track has undergone "earth-shaking" changes. The supply and demand relationship between power batteries and complete vehicles has changed from insufficient supply to oversupply, and the power battery installation rate has continued to decline.

In 2021 and 2022, the growth rate of power batteries will be far lower than that of complete vehicles, but by 2024, the installation of power batteries will be low and battery output will be higher than the installation growth rate.

According to data disclosed by Cui Shudong, secretary-general of the China Passenger Car Association, the installation rate of production batteries for power vehicles reached 70% in 2021, and has continued to decline since then. From 2022 to the first half of 2024, it was 54%, 50% and 47% respectively.

Data predicts that by 2026, the global total power battery production capacity will reach 6730GWh, which is 2.5 times the actual demand of 2614.6GWh.

Another reason may be that in a market with overcapacity, both the number and strength of players are growing. Among them, the one that has "carved up" the most market share for CATL isBYD。

In the current competition landscape of domestic power battery companies, CATL and BYD have formed a two-strong competition. Although BYD still has a large gap compared with CATL in terms of overall market share, BYD's market share has increased from 14.90% in 2020 to 27.50% in the second quarter of 2024; during the same period, CATL's market share has dropped from 50.00% to 44.70%.

Affected by multiple factors such as overcapacity in the market and the growing strength of competitors, CATL's power battery system revenue in the first half of this year was 112.6 billion yuan, a year-on-year decrease of 19%.

But even so, the dominant position of "Prince Ning" has not been shaken.

According to SNE Research data, CATL ranked first in the world in power battery usage for seven consecutive years from 2017 to 2023. From January to May 2024, the company's global market share of power battery usage was 37.5%, an increase of 2.3 percentage points from the same period in 2023, ranking first in the world.

In addition, CATL's semi-annual report shows that in the first half of this year, CATL's capacity utilization rate was 65.33%, an increase of 4.83% year-on-year. CATL stated at the semi-annual performance briefing that production and orders are full in the second half of 2024, and capacity utilization is expected to increase further.

At the same time, in order to maintain its position as the "industry leader", CATL continues to launch innovative products.

In addition to the launch of products such as the Shenxing Plus battery and the new generation of Kirin high-power batteries in the passenger car field, in July this year, CATL also launched its first commercial vehicle battery brand "CATL Tianxing" to focus on the commercial vehicle field. In addition, in the field of energy storage, it launched the world's first 5-year zero-attenuation, single-cell 6.25MWh Tianheng energy storage system.

In this regard, some industry insiders analyzed that under the current background of slowing growth in pure electric passenger vehicles, expanding into new scenarios including commercial vehicle batteries and energy storage batteries is one of the best options for CATL to increase its market share.

"King Ning" steps out of his comfort zone

For CATL, whether it is product innovation in power batteries or in-depth exploration in the field of energy storage, it ultimately comes down to making great strides in the field where it is good at.

However, facing the challenges of long-term sustainable development and the emergence of new market opportunities, CATL understands that it is not enough to simply improve in existing areas. The company must gradually step out of its original comfort zone, especially in the layout of the C-end consumer market.

In fact, CATL has become increasingly adept at being "people-friendly".

At present, the Paris Olympics, one of the world's largest and most influential sporting events, is in full swing. Although CATL did not directly place advertisements at the Paris Olympics, it cooperated with Migu Video, the rights holder of the broadcast, again after the European Cup.

It is worth mentioning that during the broadcast of the event, top sports stars such as Lang Ping, Fu Yuanhui, and Wu Minxia performed "spoken advertisements" for CATL in the promotional video "What is a Champion". This is also seen as CATL's further advancement in the marketing field to get closer to ordinary consumers.

Prior to this, CATL, like a number of other car companies that were "chasing traffic", updated the content on social platforms while starting live broadcasts.

However, CATL did not conduct any live broadcasts for more than half a year after that. It was not until the "Star Era God Travel" on April 15 this year that its official account seemed to start regular live broadcasts.

As of press time, CATL's Douyin account has launched a total of 21 live broadcasts in just three and a half months. The content includes joint live broadcasts with Dongfeng Mengshi Technology, Xiaomi Motors, Audi Motors and other automakers, live broadcasts of events such as the Beijing Auto Show, and "Q&A" series with a strong To C flavor.

Screenshot of CATL's TikTok

In addition to online, CATL’s first offline brand showroom store that directly connects to the consumer market may also be unveiled soon.

According to the previous36KrAccording to reports, CATL plans to open its first offline brand showroom in Chengdu in August 2024.

As an important window for brand display, the store covers an area of ​​15,000 square meters and exhibits more than 50 models produced by more than 20 well-known domestic and foreign automobile companies and equipped with CATL battery systems, with a total number of vehicles exceeding 150.

Phoenix Weekly Finance asked the relevant person in charge of CATL for confirmation, and the other party said, "There is no more information to disclose at the moment, and there will be official news to pay attention to later."

The fact that the official has not denied the fact is enough to show that CATL is firmly implementing its "full to C" strategy.

However, it is undoubtedly a challenging journey to complete the transformation from a traditional supplier to a brand familiar to consumers in this way. This is not only a reshaping of image and cognition, but also an all-round test of corporate strategy, market strategy and brand communication.

In addition, whether it is live broadcast or advertising, "playing with traffic" is not an easy business to do. Coupled with the favor of industry leaders for this method, the market competition has become increasingly fierce. How to attract viewers and create differentiated live broadcast content are issues that CATL has to think deeply about.