(Yicai) April 16 -- Contemporary Amperex Technology has reported a 7 percent jump in net profit for the first quarter from a year ago thanks to falling raw material costs. The Chinese battery giant also said that its German factory will likely break even this year.

Net profit was CNY10.5 billion (USD1.5 billion) in the three months ended March 31, while profit after deducting non-recurring gains and losses jumped 19 percent to CNY9.2 billion (USD1.3 billion), CATL said in an earnings report released yesterday. Revenue fell for a second straight quarter, declining 10.4 percent to CNY79.8 billion (USD11 billion).

Battery shipments jumped more than 25 percent, but revenue dropped because of lower product prices due to the decline in raw material costs, according to the Ningde-based company. Operating costs sank 16 percent to CNY58.7 billion.

CATL remains optimistic about overseas markets. Its first plant abroad -- located in Arnstadt, Germany -- increased production capacity last year, it noted. European demand has fluctuated over the short term, but the firm is confident about the market with the gradual improvement in regional infrastructure and European carmakers launching new-generation electric vehicle models, it added. 

Moody's Ratings upgraded CATL's credit rating to A3 from Baa1 and changed the outlook to ‘stable’ from ‘positive,’ citing “steady earnings, low leverage and an increasing net cash position, even as price competition is constraining revenue growth.” Moody's expects CATL’s revenue to rise 4 percent to CNY417 billion (USD57.6 billion) this year.

Morgan Stanley raised its share price target for CATL to CNY230, after upgrading its rating to ‘overweight’ from ‘equal-weight’ last month.

CATL’s shares [SHE: 300750] ended flat in Shenzhen today at CNY197.15 (USD27.23) apiece. The stock has climbed more than 20 percent so far this year.

CATL has ranked first for battery shipments globally for seven straight years. Its shipments surged 45 percent to 35.5 gigawatt hours in January and February from a year earlier, with its global market share rising to 38.4 percent from 33.4 percent, according to data from South Korean consultancy SNE Research. 

Editor: Martin Kadiev