Net profit to mother decreased by 66.92% year-on-year in 2023. In 2023, the company achieved revenue of 15.405 billion yuan, a year-on-year decrease of 30.97%; realized net profit of 1,891 billion yuan, a year-on-year decrease of 66.92%; realized deducted non-net profit of 1,824 billion yuan, a year-on-year decrease of 67.08%. In 2023, the company continued to deepen its strategic layout of “integration” and “internationalization”, and steadily promoted the increase in the company's self-supply ratio of core raw materials production capacity and the progress of overseas production capacity construction. Overall competitiveness remained good, and sales of core products continued to grow. Among them, sales of electrolytes were 396,000 tons, an increase of about 24% over the previous year. Due to various effects such as fluctuations in raw material prices and increased competition, the company's electrolyte product prices and unit profit declined in 2023. With perfect industrial chain integration and horizontal collaborative business layout, the company has overcome difficulties such as falling profits for major products. The competitive advantage is still obvious. Through a continuous integrated layout, the company has deepened its cost advantage and raised the electrolyte market share level.
Continuous integrated layout of electrolytes. In terms of lithium-ion battery materials, through continuous integrated layout and improvement, the company's self-supply ratio of core raw materials continued to increase in 2023. The self-supply ratio of liquid lithium hexafluorophosphate and LiFSI reached more than 93%, and the self-supply ratio of some core additives reached more than 80%. Despite fluctuations in product prices, the company's electrolyte product market share and profit level continued to maintain its leading position in the industry. According to third-party data, the company's domestic electrolyte market share increased to 36.4% in 2023.
Sales of daily chemical materials have continued to grow steadily. In terms of daily chemical materials, due to market price fluctuations, sales of daily chemical materials declined in 2023 compared to 2022, but product sales continued to grow steadily, and gross profit increased 7.6% year on year. The company implemented a marketing strategy that was deeply tied to major domestic and foreign customers. Sodium taurine obtained a major breakthrough into the Estée Lauder supply chain system. At the same time, it cooperated with major customers to develop and supply its key raw materials, and continued to expand its market share in international MNCs such as L'Oréal, P&G, and Unilever. In line with the current boom in domestic goods, continue to expand emerging brands, focus on key offline exhibitions, streamline key media industry associations, combine online multimedia formats to carry out marketing promotion, expand channels horizontally, and strengthen brand influence and customer acquisition.
Project construction lays the foundation for the company's growth. The company has continuously optimized its capital expenditure structure since 2023, focusing on ensuring the investment and construction progress of core projects. In 2023, the focus was on implementing electrolyte production capacity in Sichuan, liquid lithium hexafluorophosphate production capacity in Chizhou, iron hexafluorophosphate production capacity in Yichang, and lithium carbonate purification production capacity in Jiujiang, further improving the company's self-supply ratio and scope of raw materials; overseas, the German OEM factory was successfully put into operation; the North American electrolyte project continued to advance, and matters such as project site selection and land purchase were implemented one after another within 2023, further accelerating the development process of international customers.
Profit forecasting and investment ratings. Due to falling product prices, we lowered our performance. We expect the company's 2024-2026 net profit to be 2,074 billion yuan (-47%), 2,611 billion yuan (-49%), and 2,388 billion yuan (new), respectively. Given the company's leading position in the industry, we are giving the company 23 times PE in 2024, with a corresponding target price of 24.96 yuan (the previous target price was 39.00 yuan, corresponding 25 times PE in 2023, -36%), maintaining the “superior to the market” rating.
Risk warning: risk of product price fluctuation; risk of price fluctuation of raw materials; risk of technological change.