Long-term Lithium Group disclosed the 2022 Annual Report and the 2023 Quarterly Report. In 2022, the company achieved revenue of 17.975 billion yuan, +162.8% year on year; net profit of the mother was 1,489 million yuan, +112.6% year on year. 2022Q4, the company achieved revenue of 5.28 billion yuan, +129.1% year on year; net profit of the mother was 376 million yuan, +76.0% year on year. 2023Q1, the company achieved revenue of 1,934 million yuan, or -43.0% year on year; net profit returned to the mother was 0.1 million yuan, -99.7% year on year; net profit of the non-return mother was -21 million yuan, -107.6% year on year. Since Q1 downstream is in the warehouse removal stage, the company's sales volume is low, and the overall capacity utilization level is low, which has led to a decline in profitability. The company's gross profit margin in 2022 was 14.19%, -2.66 pcts year on year; net profit margin was 8.29%, year on year -1.95pcts. 23Q1 The company's gross profit margin was 3.59%, -12.01 pcts year on year; net profit margin was 0.05%, year on year -8.91 pcts.
Volume profits of cathode materials rose sharply in '22, and 23Q1 performance was under pressure. The company's performance in 2022 reached a record high, mainly driven by strong demand in the downstream market, which led the company's production and sales to booming. Among them, cathode materials sold 66,600 tons, +45.67% year on year; output was 60,800 tons, +26.86% year on year. When the revenue side only considers cathode materials, the company's unit sales price of cathode materials in '22 was 2,718 million yuan, +80.4% year on year; unit gross profit was 38,600 yuan/ton, +51.9% year on year; net profit per unit was 22,500 yuan/ton, +45.8% year on year. The short-term performance of 2023Q1 is under pressure, mainly due to weak downstream demand affecting the company's sales volume; in addition, inventory impairment has also dragged down the performance of some companies due to the decline in lithium carbonate.
Production capacity will be gradually released in 2023, and 2-3 thousand tons of lithium iron cathodes are expected to be shipped. On the production capacity side, the company's three-element cathode material base has three major bases: Lugu (10,000 tons), Copper Tube (30,000 tons), and Hi-Tech (80,000 tons), with a total production capacity of about 120,000 tons. It is expected that the company's production capacity under construction will gradually rise and be released in 2023, and the scale advantage will be further highlighted. Currently, part of the production capacity of 60,000 tons of lithium iron phosphate cathode materials deployed by the company has been put into operation in 23Q1, with a daily output of tens of tons. It is expected that batch shipments will begin in Q2, and annual shipments are expected to reach 2-3 thousand tons.
Accelerate the self-supply of precursors and improve the product matrix with a forward-looking multi-technology layout. The company is currently speeding up its integrated layout. The proportion of the company's own precursors supplied by the company will be about 50% in 2022. In the future, the self-supply ratio will be further increased through technical reform and expansion.
Furthermore, in the field of recycling used power batteries, the company has completed the development of priority lithium technology, and the recycled lithium carbonate meets battery grade standards. In terms of new technology, 1) The company's ultra-high nickel 9 series materials have now completed development and production line verification from precursors to cathode materials, and have achieved mass production and sales in the 100-ton scale. 2) The company will have more than 1,000 tons of sodium electrocathode production lines this year. 3) Solid-state battery cathode products have been evaluated and verified by many battery companies, and production line trials for 100 kg products have been provided. More new technologies will help to further strengthen the competitiveness of the company's products.
Profit forecast and valuation: Considering that sector profits are currently under pressure, we lowered the company's net profit from 2023-2025 to 10.9, 15.6, and 2.08 billion yuan, up -27.0%, 43.6%, and 33.4% year-on-year. The corresponding PE was 19.7, 13.7, and 10.3 times, respectively. In the future, with the gradual release of new production capacity and the continuous introduction of new technology, it is expected that the company's performance will gradually be realized. As a result, the “increase in holdings” rating was maintained.
Risk warning: raw material prices fluctuated more than expected; downstream market demand fell short of expectations; new product development fell short of expectations.