1H23 performance is temporarily under pressure.
The company's 1H23 achieved a revenue of 4.89 billion yuan, compared with-35.94% with a month-on-month ratio of-35.94% with a net profit of 52.72% with a return to the mother of 65 million yuan, and a net profit of 91.49% with a month-on-month ratio of-91.49% with a price fluctuation of raw materials, resulting in a significant decline in performance compared with the same period last year. Considering the weak demand for cathode materials and increased competition, we revise the shipping volume and price assumptions, and estimate that the company's EPS forecast value for 23-25 years is 0.41 yuan 0.67 soybean 0.83 yuan (previous value 0.76 soybean 0.94 pound 1.10 yuan). With reference to the company's 23-year Wind consensus forecast, the average PE is 16 times. Considering the company's rapid production capacity expansion and product structure upgrading to ensure profitability, the company's 23-year target PE is 26 times, corresponding to the target price of 10.58 yuan (the previous value is 16.76 yuan), downgraded to "overweight" rating.
2Q23 revenue and profitability month-on-month repair
The company's 2Q23 achieved an operating income of 2.955 billion yuan, with a monthly ratio of-30.30% to 52.79%, a net profit of 64 million yuan to its mother, and a net profit of 6744.26% compared with-86%. The weak demand from downstream customers and large fluctuations in the price of lithium carbonate led to pressure on the company's profitability. 2Q23 gross profit margin 7.24%, same / month ratio-11.36pctUniverse 3.65pctquarter 1Q23 due to weak downstream demand, the company's capacity utilization rate is on the low side and high-priced inventory is a drag, the company's gross profit margin has dropped sharply. Q2, as the demand picks up, capacity utilization has rebounded, and the gross profit margin has significantly rebounded compared with the previous year. The expense rate during 1H23 is 4.44%, which is-0.6pct compared with the same period last year. Among them, the rates of sales, management, R & D and financial expenses are + 0.03pct, + 0.09pct,-0.93pct and + 0.21pct, respectively. The decline in R & D expense rate is mainly due to the decrease in the price of upstream raw materials and the reduction of R & D material investment.
Rapid expansion of production capacity and optimization of shipping structure
By the end of this year, the company's ternary production capacity is expected to reach 120000 tons, lithium iron phosphate production capacity of 60,000 tons, and precursor production capacity of about 30,000 tons. Among them, lithium iron phosphate products have completed batch stability verification and small batch trial production, and Q3 is expected to ship in batches. In addition, the company announced on May 17 that it will invest 10 billion yuan to build new ternary cathode materials (matching ternary precursor production line) and lithium iron phosphate cathode materials in Fuqing City, Fujian Province, which will greatly increase the production capacity of cathode materials. The optimization of product structure will help to support unit-ton profitability, and with the increase in the proportion of high-voltage nickel single crystals and high-nickel ternary shipments in the company, as well as the further increase in the self-supply ratio of precursors, the company's profitability is expected to be guaranteed.
The new technology advances smoothly and the forward-looking layout lays the foundation.
The development of the company's cutting-edge technology is smooth, 1) ultra-high nickel ternary: 100-ton shipment has been realized and passed the audit of the large cylindrical power battery project; 2) high-nickel ternary: the stability of the second generation high-power and high-nickel NCA has been improved to achieve 100-ton delivery; 3) high-voltage fast charging ternary: the development of iterative products to further reduce cost, production line batch stability samples through customer evaluation 4) High-power ternary: the new hybrid vehicle battery has entered the first stage of mass production verification; 5) Sodium positive electrode: the first generation of product development is basically finalized, achieving ton sales.
Risk hint: the company's capacity expansion is not as expected; competition in the industry is intensified; downstream demand is not as expected.