Shares of Contemporary Amperex Technology Co Ltd (CATL), the world's largest electric vehicle battery maker, plummeted 5.02% in intraday trading, despite reporting strong first-half financial results. The sharp decline comes as investors express concerns over the company's core business profitability and a recent stock downgrade.

CATL announced a 33% year-over-year increase in first-half net profit, reaching 30.51 billion yuan ($4.24 billion), while revenue rose 7.3% to 178.89 billion yuan. However, these positive figures were overshadowed by a decline in the gross profit margin of CATL's core power battery business, which slipped to 22.41% from 23.48% a year earlier. This decrease in profitability for the company's main business segment has raised concerns among investors about CATL's ability to maintain its market-leading position in an increasingly competitive EV battery market.

Adding to the downward pressure, UOB Kay Hian downgraded CATL's Hong Kong-listed shares to "hold" from "buy," stating that the market price had hit their target. This move further dampened investor sentiment, contributing to the stock's decline. Despite CATL's continued dominance in the Chinese market, holding a 50% share of the EV-battery industry in June, and its position as a top supplier to major automakers like Tesla and Volkswagen, the market appears to be reassessing the company's near-term growth prospects in light of these challenges.