Incident: In 2023, the company achieved operating income of 15.405 billion yuan, a year-on-year decrease of 30.97%; net profit to mother was 1,891 billion yuan, a year-on-year decrease of 66.92%; and realized net profit without deduction of 1,824 billion yuan, a year-on-year decrease of 67.08%. 2023Q4 achieved operating income of 3.281 billion yuan, a year-on-year decrease of 44.29%; net profit to mother was 139 million yuan, a year-on-year decrease of 89.74%; and realized net profit without deduction of 114 million yuan, a year-on-year decrease of 91.10%.
Comment:
The electrolyte market share is the highest in the world, and the self-supply ratio continues to increase. In 2023, the company's electrolyte sales volume was 396,000 tons, up 24% year on year. The market share ranked first in the world for eight consecutive years, and the domestic market share increased to 36.4%. In addition, through continuous integrated layout and improvement, the company's self-supply ratio of core raw materials has continuously increased. The self-supply ratio of liquid lithium hexafluorophosphate and LiFSi has reached more than 93%, and the self-supply ratio of some core additives has reached more than 80%. With the Jiujiang lithium carbonate purification production line put into operation, the company achieved high-purity lithium carbonate processing capacity and started operating overseas lithium resource projects, taking the first step in resource-side layout. The company's integrated layout is expected to be further optimized in the future.
The main business continues to develop with high quality, and the overseas market layout accelerates. The company continues to expand emerging products and enhance the leading edge of electrolyte technology. New electrolyte formulation products and solutions are progressing smoothly, and core customers are successfully introduced. Cathode materials focus on next-generation high-pressure product development to optimize iron phosphate production process technology to build a competitive advantage of lithium iron phosphate; adhesive and structural adhesive product solutions continue to grow and break through. In terms of overseas markets, the company continues to develop international customers in Europe, America, and South Korea, and accelerate the development of overseas production capacity construction and supporting solutions. The company continues to expand the size of the overseas work team, the German OEM factory is successfully put into operation, the US electrolyte project continues to advance, and the company plans to promote integrated overseas production capacity construction through the establishment of a subsidiary in Morocco and continue to expand the overseas production capacity layout.
Profit forecast and investment rating: We expect the company's net profit to be 11.7/20.8/3.45 billion yuan in 2024-2026, up -38%, 78%, and 66% year-on-year, respectively. As of March 26, the market value corresponding to the PE valuation for 24 and 25 was 36/20 times, respectively, maintaining a “buy” rating.
Risk factors: risk of demand for new energy vehicles falling short of expectations; risk of iterative changes in lithium battery technology; risk of raw material price fluctuations exceeding expectations; environmental protection and production safety risks, etc.