Zhuhai Guanyu: Zhuhai Guangyu, the predecessor of a company that has been deeply involved in the consumption of lithium batteries for more than 20 years and developed rapidly after independence, has been involved in the lithium battery industry since 1998, and has been in the lithium battery industry for more than 20 years. In the early days, with its world's top polymer production technology, Guangyu Battery became the fifth largest polymer lithium battery manufacturer in the world. The company then became independent from Ha Guangyu in 2017 and officially changed its name to Zhuhai Guanyu in 2019. After independence, the company's operating performance turned a loss into a profit, and ushered in four years of rapid development. It was successfully listed on the Science and Technology Innovation Board in October 2021.

Resumption in 2022: The industry cycle caused profit fluctuations, but the company's alpha was realized. The company achieved considerable overall growth during the 2018-2022 period, but there were large fluctuations in the company's operations in 2022, mainly due to the weakening of the consumer industry affected by the pandemic. In addition, the company's power sector was still in its infancy, and losses were under pressure as the share gradually increased. Specifically: 1. The company's main products are laptops and mobile phone batteries. The business situation was first affected by cyclical fluctuations in the consumer lithium battery industry in 2022. 2. In addition, the company's operating rate, customer dispersion, and resource price increases have further disrupted the company's profit. 3. The power storage battery business is in its infancy, and large losses have also had a partial impact on the company's profit.

Overall, despite the company's poor financial data in 2022, the company achieved a positive breakthrough in operations; the company's laptop share continued to rise, and new mobile phone customers continued to land: 1) In terms of laptops, inventory adjustments, high inflation and other factors had a certain impact on laptop market demand in 2022, leading to a decline in laptop market shipments throughout the year; however, the company continued to expand and optimize its customer structure based on years of strategic layout and technical reserves, and still achieved an increase in global share during the industry's downturn. At the same time, the company also made a breakthrough in customer targeting in terms of power storage. 2) In terms of mobile phones, demand for smartphones has also shrunk significantly due to the downturn in the global economy, and due to consumer sentiment brought about by the pandemic and inflation, the mobile phone replacement cycle has been lengthened, and global smartphone shipments in 2022 fell 9.1% year on year; the company still relies on the accumulation of high-quality customers, plus the expansion of new customers, has successfully entered the Apple and Vivo supply chains and started supplying, and in 2022 its global share increased 0.59pct year on year, ranking fifth in the world.

Looking ahead to 2023-24: New customer breakthroughs, power storage to reduce losses. The operating inflection point has reached after experiencing large fluctuations at the industry level in 2022, the company is expected to usher in positive recovery in 2023-2024: In terms of consumer batteries, 1. First, judging from industry demand, the mobile phone replacement cycle is 2-3 years, but the replacement cycle has been lengthened due to the turbulence of the epidemic in recent years, which has indirectly led to the continued weak performance of the mobile phone market in 2022-2023. The last high point of smartphone shipments was in 2021. Considering that three years from now will be the next round of centralized smartphone replacement, 2024 may usher in a wave of recovery in smartphone demand. In terms of laptops, the 2023Q1 global laptop market continues to be under pressure due to economic turbulence. Consumer demand has gradually picked up since 2023Q2. With the arrival of the hardware replacement cycle, global laptop shipments are expected to experience a double-digit recovery in 2024. 2. Second, there is still room for the company to continue to increase its share in the mobile phone market. As LG and Samsung shift their focus to power batteries, Guanyu will seize this part of the market one after another, and there is still plenty of room for improvement. 3. Third, Apple MR enters a new product cycle, opening up incremental space. In terms of power and energy storage batteries, as the scale gradually expands, the loss situation will improve markedly.

Risk warning

1. Consumer battery sales fell short of expectations;

2. The progress of the project fell short of expectations.