(Yicai Global) May 5 -- Shares of Contemporary Amperex Technology plunged after the Chinese power battery giant reported a more than 23 percent decline in first-quarter profit because of surging raw material costs.

CATL [SHE: 300750] closed 8.2 percent lower at CNY376 (USD56.77) today, the first trading day after the Labor Day holiday, after earlier sinking by as much as 14 percent. The stock has declined 36 percent so far this year.

Net profit was CNY1.5 billion (USD226.8 million) in the three months ended March 31, versus CNY1.95 billion a year earlier, according to the financial results Ningde-based CATL released on April 29. Profit fell 82 percent from the previous quarter.

Though revenue soared 154 percent to CNY48.7 billion (USD7.4 billion) in the first quarter, operating costs almost tripled to CNY41.6 billion.

China market prices for battery-grade lithium carbonate rose more than fivefold to an average of CNY421,000 (USD63,655) per ton in the period, buoyed by high demand and tight lithium supply, according to data from the Ministry of Industry and Information Technology.

Raw material costs rose more than expected and CATL was relatively cautious in increasing battery prices, the company said during a conference call with investors yesterday. Negotiations with clients on prices are progressing smoothly, it noted, adding that gross profit margin is likely to gradually recover.

A Covid-19 outbreak in Ningde is under control, with little impact on operations, CATL said, while Shanghai’s lockdown led clients to cut output, but as production at most carmakers is starting to resume, the impact is limited.

CATL's power battery capacity has ranked first worldwide for five years in a row, according to data SNE Research published on May 2. In the first quarter, CATL shipped 33.3 gigawatt-hours of batteries, up 138 percent from a year earlier, for a market share of 35 percent.

Editors: Dou Shicong, Futura Costaglione