Changyuan Lithium Co., Ltd. disclosed its 2023 three-quarter report, and 23Q3 earnings were under short-term pressure. In 2023Q1-Q3, the company achieved revenue of 8.37 billion yuan, -34% year-on-year; net profit of 72.236 million yuan, -94% year-on-year; net profit of net income after deduction of 24.176 million yuan, -98% year-on-year. Among them, Q3 achieved revenue of 3.48 billion yuan, +18% month-on-month; net profit of 7.724 million yuan, -88%; net profit after deducting non-return net profit of -6.137 million yuan, -112% month-on-month. The comprehensive gross profit margin of 2023Q1-Q3 company was 5.7%, y-10.1pct; net profit margin was 0.9%, y-7.9pct. Among them, the Q3 gross profit margin was 5.5%, -1.7pct; net profit margin was 0.2%, -1.9pct month-on-month.
1) Volume: 2023Q1-Q3 shipped 42,000 tons of cathode materials, of which 21,000 tons are expected to be shipped in Q3, +40% over the previous month. Q3 shipments increased significantly from month to month.
2) Price/benefit: When only cathode materials are considered on the revenue side, we expect the average sales price of Q3 cathode materials to be 166,000 yuan per ton, -16% over the previous year, mainly due to large fluctuations in lithium carbonate prices and increased market competition. The profit per ton of Q3 cathode materials is under relative pressure, mainly due to the company's calculation of some inventory impairment due to rapid fluctuations in lithium carbonate prices. As raw material prices stabilize in the future, the pressure on the company's inventory management is expected to ease.
In October, lithium iron phosphate is expected to be shipped in kilotons, and sodium cathodes have already been shipped in small quantities. Currently, the company mainly ships medium nickel high-voltage products, and also lays out high-nickel, ultra-high nickel, lithium iron phosphate and sodium cathode materials in various directions. Development aspects of new materials: 1) High nickel ternary cathodes: create a new, green and environmentally friendly process with a short process to reduce production costs while further improving product quality and production stability. 2) Lithium iron phosphate cathode: Currently, batch supply has been achieved. It is expected to be shipped in kilotons in October, and Q4 is expected to begin to release rapidly. 3) Sodium cathode: At present, a sodium cathode production line has been modified, and the layered oxide product process has been completed, and small-volume shipments have been achieved. In terms of overseas expansion, PPES orders have now begun to be continuously supplied; other mainstream overseas customers are being actively imported; and cooperation projects with Axens are progressing smoothly. The expansion of overseas customers and projects is progressing steadily.
Profit forecast: Due to the intensification of competition in the three-yuan cathode industry this year, we adjusted the company's net profit for 2023-2025 to 1.2, 53, and 63 billion yuan respectively, with year-on-year increases of -92.3%, 360.3%, and 19.5%, corresponding to PE of 143.3, 31.1, and 26.0 times, respectively. Maintain the “Overweight” rating.
Risk warning: raw material prices fluctuate beyond expectations; downstream market demand falls short of expectations; new product development falls short of expectations