The company released the 2023 annual report and the 2024 quarterly report, and achieved net profit of 723 million yuan for the full year of 2023; the company continued to reduce costs and increase efficiency, continued optimization of the product structure, and the competitive advantage is expected to be maintained; and the rating for increasing holdings was maintained.
Key points to support ratings
Net profit of 2023 was 723 million yuan: The company released its 2023 annual report, achieving revenue of 4.391 billion yuan, a year-on-year decrease of 8.18%; realized net profit of 723 million yuan, a year-on-year decrease of 43.94%; realized deducted non-net profit of 713 million yuan, a year-on-year decrease of 44.34%. According to the annual report calculation, 2023Q4 achieved net profit of 155 million yuan, a year-on-year decrease of 36.28% and a year-on-month decrease of 5.24%.
Net profit for the first quarter of 2024 was 149 million yuan: The company released the 2024 quarterly report. In 2024Q1, net profit attributable to mother was 149 million yuan, a year-on-year decrease of 35.48%, after deducting non-return net profit of 143 million yuan, a year-on-year decrease of 35.16%. 2024Q1's gross sales margin fell 8.35 percentage points year on year to 26.64%; net sales margin fell 6.93 percentage points year on year to 17.27%.
Negative electrode sales maintained a relatively rapid growth rate, and profits were under pressure: in 2023, the company sold 140,900 tons of anode materials, up 31.50% year on year; achieved revenue of 37.36 billion yuan, down 11.81% year on year; gross margin fell 16.50 percentage points year on year to 27.16%. According to the company's announcement, the company's production schedule increased significantly from month to month in March 2024. It is expected to maintain a high operating rate from March to the second quarter. As market demand picks up, the company's profit level is expected to be fixed to a certain extent during the year, and it will continue to maintain a relatively high net profit level per ton in the industry. The company has begun construction of the “Integrated Lithium Ion Battery Anode Material Integration Project with an annual output of 100,000 tons” in Wuji County, Shijiazhuang, and is stepping up construction with a view to gradually putting into operation in the fourth quarter of 2024.
The product structure continues to be optimized and the share of fast charging has increased: According to the announcement, the company completed the development and introduction of 4C and above products in 2023, and large-scale shipments will be launched in the first quarter of 2024. The company expects future shipments of fast charging products to continue to increase, and 4C and above fast charging products will occupy an advantageous position in the sales structure in 2024.
valuations
Combined with the company's annual report and quarterly report, considering that competition in the anode materials industry is still fierce, we adjusted the company's predicted earnings per share for 2024-2026 to 2.80/3.47/4.39 yuan (the original forecast diluted earnings per share was 3.18/4.16/- yuan), corresponding to a price-earnings ratio of 13.6/11.0/8.7 times; maintaining an increase rating.
The main risks faced by ratings
Risk of fluctuations in raw materials and electricity prices, NEV industry policies falling short of expectations, NEV products falling short of expectations, customer concentration risks, price competition exceeding expectations, and industry chain demand falling short of expectations.