China’s battery behemoth CATL, has posted a notable 26% year-on-year rise in third-quarter net profit, signaling robust growth amid challenging market conditions.

The Shenzhen-listed company revealed earnings of 13.14 billion yuan ($1.85 billion) in the July-September period, up from a 13.4% gain in the previous quarter.

However, the firm continues to grapple with declining revenues, which dropped 12.5% year-on-year to 92.3 billion yuan, marking the fourth consecutive quarter of revenue contraction.

The profit growth underscores CATL’s dominant market position, maintaining a 44% share of batteries used in Chinese-made electric vehicles (EVs) in September.

Still, competition is tightening as second- and third-place rivals BYD and CALB saw their combined market share slip by 1.4 percentage points to 30.9%, according to data from the China Automotive Battery Innovation Alliance.

Beyond its domestic stronghold, CATL is expanding its global footprint. Jefferies analysts highlight the company’s LRS (Licensing, Royalty, and Service) business model as a promising revenue stream, with the potential to contribute to CATL’s bottom line by late 2024.

Additionally, the battery giant’s international ambitions took another step forward this week with the opening of a research and development center in Hong Kong—its sixth globally—as it positions itself to export cutting-edge technology abroad.

In Southeast Asia, CATL has also gained traction with its $1.2 billion joint venture with Indonesia Battery Corporation to ramp up battery production to 15 gigawatts annually.

The move aligns with Indonesia’s goal to become a global EV hub, adding another layer to CATL’s diversified international strategy.

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