(Yicai) Oct. 21 -- Contemporary Amperex Technology reported a 26 percent profit increase for the third quarter of the year, mainly because the Chinese power battery giant was able to cut production costs more than product prices.

Net profit was CNY13.1 billion (USD1.8 billion) in the three months ended Sept. 30 from a year earlier, the Ningde-based firm announced on Oct. 18. Revenue fell 12 percent to CNY92.3 billion.

Profit growth came amid a challenging market environment where product prices for electric vehicle batteries have been falling due to competitive pressures and declining material costs. But CATL was able to manage costs effectively, reducing expenses even more sharply than the price cuts, executives said during the firm’s earnings conference call.

The company has also benefited from the introduction of new products with higher premiums, pushing its gross profit margin to a record 31.2 percent, the most since late 2018.

After climbing by as much as 5 percent in Shenzhen earlier today, CATL’s shares [SHE: 300750] finished up 1.4 percent at CNY253.36 (USD35.62) apiece, bringing the stock gain so far this year to more than 60 percent.

For the first three quarters of the year, CATL logged a net profit of CNY36 billion on revenue of CNY259.1 billion (USD36.5 billion), up 16 percent and down 12 percent, respectively. Operating costs narrowed more than 19 percent to CNY186 billion, with research and development expenses shrinking 12 percent to CNY13.1 billion.

CATL’s global installed power battery capacity surged 27 percent to 189.2 gigawatt-hours in the first eight months, ranking first with a market share of over 37 percent, according to data from SNE Research. It has ranked first for the past seven years.

Editor: Futura Costaglione