Maintain an increase in holdings rating. Maintain the company's 2023-2025 EPS at 0.03 yuan, 0.62 yuan, and 0.71 yuan, and maintain the target price of 13.02 yuan.
The production chain of the lithium battery industry chain is not booming during the peak season, and the company is expected to grow faster than the industry. On the sales side, since the fourth quarter of '23, sales of new energy vehicles in China have exceeded 1 million units for the first time in a single month. Annual sales volume is expected to reach more than 9.3 million units, an increase of more than 35% over the previous year. On the production side, due to the rapid decline in material prices, the lithium battery industry chain has accelerated inventory removal, which has caused demand on the production side to a certain extent to slow down. According to Xinyi data, from January to September 2023, global anode production was 1,254,600 tons, up 20.6% year on year; during the same period, the company's output was 107,300 tons, up 25.5% year on year. We believe that at present, the industry is still in the process of clearing out. The company is deeply bundling joint ventures with core customers such as Ningde and Yiwei, and demand is expected to be better than that of the industry.
Profits are expected to gradually bottom out and level out. According to Xinyi's data, in December, the price of graphitization (box type) has dropped to 8,250 yuan/ton, and the price of low-end artificial graphite has dropped to 20,500 yuan/ton. Affected by the industry's overcapacity since the second half of 2022, the price of anode materials has continued to decline. We believe that in the future, considering anode materials, the share of battery costs and battery quality assurance requirements is already low, so it is expected that there is limited room for decline. As the company's graphitization self-sufficiency rate rises, profits are expected to gradually bottom out and level out.
Gradually develop overseas markets. The company has now achieved batch supply to customers such as SKon and LGES. Furthermore, the company is actively promoting various overseas expansion efforts to further increase the share of overseas sales in the lithium battery anode business.
Risk warning: The industry price war continues, and demand for electric vehicles falls short of expectations