Key points of investment:
2024Q1 Performance Overview:
2024Q1 achieved revenue of 1.52 billion yuan, -68% YoY, -41% month-on-month, realized net profit of 110 million yuan, -74% YoY, and -74% month-on-month, realized net profit withheld from mother of 104 million yuan, -75% YoY, and -70% month-on-month.
The decline in profit per ton was mainly due to the misalignment of overseas project stages
We expect the 24Q1 shipment volume of three yuan+ lithium cobalate to be about 10,000 tons, the net profit per ton is about 11,000 yuan/ton, and lithium iron shipments are expected to be at the level of several thousand tons. For the time being, there is a slight loss. Profit declined month-on-month and year-on-year, mainly due to changes in overseas customer projects, and the share of revenue from overseas projects with higher processing costs declined from a high level last year. The company's high-voltage, high-nickel high-voltage, ultra-high nickel, and monocrystalline products have been introduced into many overseas and domestic projects. Overseas customers are difficult to import, the certification cycle is long, and the product life cycle is long. It is expected that the overseas share will gradually rise after the launch of new projects, driving a gradual restoration of profitability. Construction of the Finnish project is expected to begin within the year, and procedures will continue to advance to target the European medium- to long-term market.
New card position solid/lithium manganese/sodium electric technology
The company's solid-state batteries have long-term cooperation with leading domestic startups such as Qingtao, Weilan, and Huineng to provide technical development support to startups. The card slot is stable. Currently, it has successfully introduced solid-state battery customers such as Huineng, Qingtao, Weilan New Energy, and Ganfeng Lithium Battery, and has achieved mass sales. The company's product is a high-nickel cathode composite solid electrolyte. The layout has long been built up in the field of solid electrolytes, the process principles are similar, and the production line is being developed to expand the production line and increase the market position. A variety of high-energy, high-safety, and long-life lithium phosphate (manganese) iron materials continue to be sold in bulk to leading domestic power and energy storage battery customers such as China Innovation Aviation, Kexin, and Yichun Qingtao. The products lead in energy density, low temperature and safety performance. The product performance index of sodium electric cathode materials is leading in the industry, and shipments have continued to grow steadily, and hundreds of tons of supply have been achieved.
Profit forecasting and investment advice
Considering the short-term slowdown in overseas demand, the long project volume cycle, and increased competition in the supply chain of overseas customers in the short term, we adjusted the company's net profit forecast for 2024-2026 to 8.7/13.0/1.94 billion yuan (the previous forecast was 24.7/32/100 million yuan), corresponding to the current market value PE of 26/17/12 times. Considering the company's new technology and the forward-looking position of overseas high-end customers, we gave 2024 30 times PE, corresponding to a target price of 51.6 yuan, maintaining a “buy” rating.
Risk warning
Demand for ternary cathode materials falls short of expectations, fluctuating raw material prices and processing costs, and implementation of new technology falls short of expectations.