According to the GLONGHUI July 20丨Minsheng Securities Research Report on the 19th, according to estimates, Suotong Development (603612.SH) achieved net profit of -137 million to -107 million yuan in 2023Q2, Q1 of -270 million yuan, and net profit of 410 million yuan in 2022Q2. The company's performance fell short of the bank's expectations. By the end of March 2023, the company held 4.28 billion yuan in inventory. While prices were declining, losses from falling inventory prices were also quite large, causing the company's profits to be significantly hampered. Pre-baked anode production capacity is expanding rapidly, and Q3 results are expected to reverse. By the end of 2022, the company had a production capacity of 2.82 million tons of pre-baked anodes, the 300,000-ton anode project in Suotong in Longxi and the 1,000-ton post-calcined coke project in Zhijiang, Hubei had signed agreements, and Shandong Innovation's 340,000 tons of pre-baked anodes and 300,000 tons of post-calcined coking projects had been approved. The company plans to have a production capacity of 5 million tons of prepared anodes by 2025. The lithium battery anode project is progressing steadily, opening up a second growth curve; laying out the overseas pre-baked anode market to open up room for growth. The price of petroleum coke fluctuates, and the price of pre-baked anodes may stabilize. The profit inflection point is close. The company's production capacity for pre-baked anodes and anode materials is progressing steadily, and growth is strong. The bank expects the company to achieve net profit of 157 million yuan, 1,092 million yuan, and 1,538 million yuan in return from 2025, with EPS of 0.29 yuan, 2.02 yuan, and 2.84 yuan respectively. The PE corresponding to the closing price on July 19 will be 60, 9, and 6 times, respectively, maintaining the “recommended” rating.