CATL's H1 2026 filing, published July 25, is the only complete interim report from a major Chinese cell producer as of August 14. REPT BATTERO, Gotion High-Tech, and Farasis Energy have not filed final H1 results; exchange deadlines give them until August 31. BYD's latest periodic report covers Q1.
That disclosure asymmetry shapes everything below. CATL's numbers define what leader economics look like at the current LFP cell floor. The Tier-2 evidence available today is a profit alert, a performance forecast, and a Q1 report — thinner material, but already enough to separate three producers into distinct financial profiles. What follows uses the best available data for each, dated precisely, with the gaps named where they matter.
The CATL baseline
The figures that matter for supplier qualification sit beneath the headlines (RMB 276.9B revenue, up 54.8%; RMB 43.3B attributable net profit, up 42.0%).
Utilization: 94.86%, as reported. At that level, fixed costs — depreciation, labor, plant overhead — spread across nearly all available output, which is the cheapest per-unit position a cell plant can occupy. Every point below it raises unit cost. None of the three Tier-2 producers in this comparison discloses a utilization rate at all.
Operating cash flow: RMB 60.2B, up 2.6% from H1 2025. Revenue over the same period grew 54.8%. Cash generation is strong in absolute terms, but the ratio to revenue compressed from roughly 33% to roughly 22%. CATL is converting a smaller share of each revenue yuan into operating cash than a year ago. The level remains comfortable; the trend matters more.
Working capital: Combined notes and trade payables reached RMB 355.5B at June 30, up 69.0% year-on-year, growing faster than revenue. Trade receivables grew 38.6% to RMB 88.4B, slower than revenue. CATL is collecting faster relative to sales while paying its own suppliers slower relative to purchases. The filing does not publish days-payable-outstanding, and the H1 2025 filing disclosed a RMB 46.0B supplier-finance arrangement that the H1 2026 text does not update with a comparable figure. How much of that RMB 355.5B payables balance is financed rather than simply owed cannot be isolated from disclosure.
Liquidity: RMB 440B in liquid assets, RMB 360.5B in unused bank facilities.
Margins: I covered the margin structure in Issue #7 and decomposed the overseas-domestic spread in Issue #8. The baseline figure: CATL's battery gross margin was approximately 21% on a revenue-weighted blend of its two battery segments in H1 2026, derived from the filing's reported power-battery-system margin of 20.63% (RMB 192.1B revenue) and ESS-battery-system margin of 23.96% (RMB 53.3B revenue). Domestic battery gross margin has declined 4.02 points over two years while overseas margin rose 0.32 points. The blend stays healthy, but the domestic line — the one competing at the same price floor as Tier-2 producers — is where the compression sits.
So the baseline is a producer running near full utilization, generating substantial operating cash though a shrinking share of revenue, holding an enormous liquidity buffer, and using its market position to push working capital in its favor. A meaningful part of CATL's cash position comes from its ability to extend payment terms to its own suppliers. Tier-2 producers cannot do this. For them the working-capital dynamic runs the other way.
REPT BATTERO — a turnaround that cannot yet be verified
REPT's July 9 profit alert forecast H1 revenue of RMB 14.5–15.2B (up 52.8–60.1%) and net profit of RMB 700–850M, reversing a RMB 63M loss in H1 2025. The company attributed the improvement to higher shipments, scale effects, and cost reduction. The final interim report is due by August 31.
The alert disclosed no gross margin, no operating cash flow, no receivables or payables figures, no utilization rate, and no split between recurring and non-recurring income. Until the full filing arrives, the turnaround is a management-account estimate.
The 2025 annual backdrop. REPT's audited 2025 results reported 11.2% consolidated gross margin (11.9% EV, 10.8% ESS), RMB 3.1B in operating cash flow, and RMB 8.5B in net trade-and-bills receivables against RMB 17.4B in trade-and-bills payables. Collections were concentrated within three months — RMB 4.1B of RMB 4.6B net trade receivables — which suggests customers were paying reasonably current. The company reported 90 GWh of designed production capacity and 82.7 GWh of battery sales in 2025 but disclosed neither actual production output nor a utilization percentage.
Subsidies embedded rather than visible. REPT received RMB 662.5M in government grants for property, plant, and equipment during 2025 and carried RMB 1.45B in deferred government grants at year-end. Those grants offset asset carrying values instead of flowing through the income statement as a subsidy line, which means a "subsidy income as share of net profit" ratio cannot be calculated from the P&L at all. The support is real; it shows up as lower reported depreciation. The annual report also recorded RMB 105.6M in additional input-VAT deductions within other income, sitting in a combined line alongside interest income and fair-value gains.
What the final filing needs to show. Gross margin trajectory: did 11.2% hold or improve with scale? And operating cash flow: did the profit turnaround produce cash, or did it sit in receivables? An H1 gross margin of 13–14% with positive operating cash flow would give the turnaround substance. Flat margin with profit coming from volume growth on thin margins would leave the position more fragile than the headline reads.
Gotion High-Tech — the recurring-profit gap
Gotion's July 15 performance forecast is the clearest illustration in the current data of how a reported net profit figure can mislead a supplier-qualification assessment.
The headline: H1 attributable net profit of RMB 1.20–1.55B, up 227–323%.
Attributable profit after non-recurring items: RMB 85–120M, up 17–65%.
The RMB 1.1–1.4B difference came from what the filing describes as investment income and fair-value changes on shares held. The forecast does not name the specific securities. Gotion's 2025 annual report listed holdings including Chery Automobile, Copperfoil, Seres, and VinFast among others, with large fair-value gains on the Chery and Copperfoil positions in 2025. Some external commentary has attributed the H1 2026 gain to Volkswagen equity; the filing does not support that attribution.
Gotion's battery operations produced RMB 85–120M in adjusted profit over six months. Against its revenue run-rate, that is an adjusted operating margin well below 1%. Roughly 90% of reported net income came from securities holdings rather than from making and selling batteries.
Q1 detail fills in the picture. Gotion's Q1 2026 report showed RMB 11.7B revenue, RMB 21.1M net profit, and RMB 155M in operating cash flow. Trade receivables reached RMB 19.9B, up 21.9% from December 2025 in a single quarter, against Q1 revenue growth of 29.3% year-on-year. Measured over three months against a year-end base, that pace of receivables growth means credit extension is running ahead of sales growth: Gotion is financing customers to win or retain volume. Trade payables meanwhile fell 5.4% to RMB 18.1B. Receivables expanding, payables contracting — the mirror image of CATL's position.
The 2025 annual report disclosed segment gross margins of 14.39% for power battery systems and 20.75% for energy storage battery systems, both above REPT's reported levels. But Q1 operating cash flow of RMB 155M on RMB 11.7B revenue works out to 1.3%, so the margin is not converting efficiently into cash. Investing outflows of RMB 4.7B in Q1 were funded by RMB 4.1B in financing inflows. Gotion is still raising capital to fund expansion.
Q1 government grants recognized in the non-recurring schedule were RMB 316.2M, nearly offset by RMB 319.6M in securities losses. The grants are material against a RMB 21.1M bottom line; in Q1 they happened to wash against investment losses.
For a procurement team, the read is this. Gotion can produce and sell at current prices, and its battery segment margins are positive. But the operating business generates minimal cash after working-capital demands and capex, and the reported profitability that makes the company look healthy rests on a securities portfolio that can reverse in any quarter.
Farasis Energy — cash burn accelerating
Farasis is the most straightforward profile to read, and the trajectory is worsening.
The Q1 2026 report showed RMB 1.67B revenue (down 28.3%), a net loss of RMB 140M, and negative operating cash flow of RMB 397M. In Q1 2025 operating cash flow was negative RMB 126M. Cash burn more than tripled year-on-year while revenue contracted, so the deterioration is accelerating rather than flattening. Monetary funds fell from RMB 5.4B to RMB 4.4B over the three months. Government grants recognized in Q1 were RMB 14.5M, immaterial against the loss.
Derived consolidated gross margin was approximately 13.8% — my calculation from reported revenue and cost of sales, not a disclosed figure — which puts it near REPT's 2025 level. The losses come from gross profit being insufficient to cover operating expenses at current volumes, compounded by the fixed-cost burden of new plants in ramp-up.
Farasis's 2025 annual report described its Ganzhou 30 GWh and Guangzhou 30 GWh projects (Phase I each) as in capacity ramp-up, with high depreciation and improving but still-suboptimal utilization and yield. No utilization percentage was disclosed for either plant.
Combined notes and trade payables declined 15.8% in Q1 while receivables stayed roughly flat. Farasis is losing supplier credit without any offsetting acceleration in customer collections.
What the comparison shows
| Metric | CATL (H1 2026) | REPT (FY 2025 / H1 alert) | Gotion (Q1 2026 / H1 forecast) | Farasis (Q1 2026) |
|---|---|---|---|---|
| Utilization | 94.86% | Not disclosed | Not disclosed | Not disclosed |
| Gross margin | ~21% blended battery | 11.2% (FY 2025) | ~16.1% consol. (Q1, derived) | ~13.8% (Q1, derived) |
| Op. cash flow | RMB 60.2B | RMB 3.1B (FY 2025) | RMB 155M (Q1) | −RMB 397M (Q1) |
| Non-recurring share of net profit | Not separately flagged | Not disclosed (H1) | ~90% (H1 forecast) | ~2% (Q1) |
| Receivables growth vs. revenue | Below revenue growth | Concentrated <3 months | Above revenue growth | Flat |
| Payables trend | Growing faster than revenue | Not disclosed (H1) | Declining | Declining |
Figures come from different reporting periods and should not be read as contemporaneous snapshots.
Utilization is the widest disclosure gap. CATL's 94.86% is the only reported figure among the four. The single largest driver of unit cost cannot be compared across these producers at all, which is why the ramp-cost explanations offered by Farasis and the scale-effect explanation offered by REPT have to be assessed indirectly, through margin and cash rather than through output. In Issue #9 I sorted these producers by evidence state rather than reputation; utilization remains the widest evidence gap in that sort.
Receivables and payables direction separates the profiles as clearly as margin does. CATL collects faster relative to sales and pays slower. Gotion extends more credit, at an accelerating pace. Farasis's payables are shrinking while its cash burn intensifies. Working-capital direction is a reasonable proxy for where a producer sits in its own supply chain's credit hierarchy, and it updates quarterly, which margin trends often do not.
Recurring profit as a share of reported net income is the sharpest filter in this data. Gotion's forecast makes it legible: RMB 1.2–1.55B reported, RMB 85–120M from making and selling batteries. A qualification process that stops at "profitable" misses that the battery business is close to breakeven. Farasis reports losses that are almost entirely operating losses, with no portfolio cushion either way.
What this means for the price floor
Chinese LFP cell spot sits near RMB 0.36–0.37/Wh on mainstream assessments, with some utility-scale transactions reported below those levels. The four producers occupy very different positions at that price.
CATL generates substantial cash at ~21% blended battery gross margin. Domestic margin is compressing, but from a level that still leaves operating headroom.
REPT appears to have reached profitability at this pricing, pending verification. If H1 gross margin improved from 11.2% toward 13–14%, it can sustain operations at the current floor — thin, but viable.
Gotion's battery operations are at the edge of breakeven. Extrapolating from Q1's revenue run-rate, H1 adjusted profit of RMB 85–120M implies an adjusted operating margin of roughly 0.4–0.5% on the battery business. Sustained price compression below the current floor would push those operations into loss, leaving reported net income dependent on the securities portfolio and government grants. Gotion can hold current pricing. It has almost no margin of safety if pricing moves against it.
Farasis is losing money at current pricing and current volumes. Q1 gross margin of ~13.8% produced roughly RMB 230M in gross profit on RMB 1.67B revenue; operating expenses consumed that and more, for a RMB 140M net loss. The ramp explanation is plausible on its face — higher utilization would spread depreciation across more output and could close the gap. But monetary funds fell roughly RMB 1B in a single quarter, reflecting operating losses plus continued investment spending. At that consumption rate against RMB 4.4B remaining, the ramp has roughly four to five quarters before it needs significant new financing. If utilization does not improve materially inside that window, what determines Farasis's viability as a supplier is the terms on which someone provides the next round of capital, not its break-even path.
My assessment of the floor mechanism: it holds where it is because CATL can generate cash at these prices and has no operational reason to cut, while weaker producers lack the cost position to force it lower and the balance sheet to sustain a fight if they tried. That says nothing about whether a given Tier-2 supplier can stay at this price for the duration of a three-year contract, which is the question a procurement team actually needs answered.
Four indicators from these filings speak to it directly:
- Recurring operating profit as a share of reported net income
- Receivables direction relative to revenue growth
- Payables direction — gaining or losing supplier credit
- Operating cash flow as a share of revenue
A producer that converts margin into operating cash and manages working capital in its favor can hold pricing for the life of a multi-year contract. A producer reporting profit that does not reliably generate cash, extending credit to maintain volume, and bridging the gap with non-operating income or embedded subsidies is holding the same price on a basis that has not been tested by a demand slowdown.
CATL's H1 filing provides the measuring stick. The Tier-2 filings due by month-end will test the turnaround (REPT), the portfolio cushion (Gotion), and the ramp-cost explanation (Farasis) against full disclosure. Today's evidence sorts the three into stabilizing, portfolio-sustained, and cash-burning. The final reports will show whether any has moved.
- September consumption tax impact: The 2% consumption tax on lithium-ion batteries takes effect September 1, and whether producers absorb it or pass it through will be visible in post-September invoices and normalized domestic quotes — a direct test of margin durability at each tier.
- CATL supplier-finance update: CATL's H1 2025 filing disclosed RMB 46.0B in supplier-finance arrangements, but the H1 2026 report did not reproduce a comparable figure, leaving the financed share of its RMB 355.5B payables balance unresolved.
- Tier-2 final H1 filings: REPT, Gotion, and Farasis face an August 31 exchange deadline for final interim reports that will disclose the gross margins, operating cash flows, and working-capital detail missing from their preliminary alerts and forecasts.
- Anti-involution payment enforcement: Sixteen major battery makers were called to shorten supplier payment periods in April, and whether days-payable-outstanding actually fall in H1 filings will test whether this initiative changes the cost curve or remains rhetorical.