Company announcement: In 2023, the company achieved revenue of 15.4 billion yuan, 1,891 billion yuan, and 1,824 billion yuan respectively in revenue, down 30.97%, 66.92%, and 67% year-on-year respectively. In 2024, the Q1 Company achieved revenue of 2,463 billion yuan, 114 million yuan, and 101 million yuan of non-net profit respectively, with year-on-year declines of 42.91%, 83.54%, and 85.32% respectively. The profit situation in the electrolyte industry bottomed out, and the company maintained a certain level of profit even when the entire industry made marginal profits or losses, reflecting its comprehensive advantages; at the same time, the company's market share continued to rise. Maintain a “Highly Recommended” rating.
Brief analysis of Q1 results for 2023 & 2024. The company's net profit for Q4 in 2023 and Q1 of 2024 was about 139 million yuan and 114 million yuan respectively, both falling month-on-month. The main reasons are: a, 2023Q4-2024Q1 lithium carbonate prices fell sharply, and the average price of electrolyte fell 10% and 17%, respectively, directly affecting the profit per electrolyte unit. b. The company's ferrophosphate business is still climbing. Under lower sales prices, it is still in a state of loss. It is estimated that the loss for both quarters exceeded 50 million yuan.
The market share of electrolytes continues to increase. Based on industry data, it is estimated that the company shipped nearly 400,000 tons of electrolyte in 2023, an increase of nearly 24% over the previous year. 2024Q1 shipped about 90,000 tons of electrolyte, an increase of 17% over the previous year.
In 2023, the company's domestic market share of electrolytes reached 36.4%, ranking first. In addition, the company has been outselling liquid lithium salt since 24Q1. The company's products have a clear cost advantage over peer solid lithium salt, and are expected to be released in Q2. If only lithium salt is considered, the company's market share will be higher.
The electrolyte industry's profit bottomed out. It is estimated that the average price of the company's 24Q1 electrolyte including tax has fallen to about 21,000 to 22,000 yuan/ton, down 17% from the previous month. It is estimated that the company's 24Q1 profit per ton was about 0.11 million, a significant decline from month to month. However, with the exception of Tianci, the electrolyte peers and upstream 6F, additives, and solvents were all in a state of marginal profit or loss, and small third- and fourth-tier factories generally drastically cut production or shut down. Judging from the prices of the three parties, the price of lithium hexafluorophosphate has moved upward since March. The average price has been raised from 63,500 yuan/ton to 71-72,000 yuan/ton, and some 6F manufacturers in the same industry have reported that the capacity utilization rate is improving. Overall, the profit situation of electrolytes and their upstream industrial chain has basically bottomed out. The company's overall competitive advantage in the electrolyte sector has been consolidated and strengthened in this round of industrial evolution, and its profit situation is likely to improve in the second quarter of this year.
Profit forecast and investment advice: The company's electrolyte business has a significant competitive advantage. Iron phosphate cathode precursors are opening up new growth points, and its traditional daily chemical business is operating steadily, but due to the rapid drop in electrolyte prices, the profitability of the industry bottomed out, the company's profit forecast for 2024-2025 was lowered, and the company's profit forecast for 2024-2025 was lowered, and the “highly recommended” rating was maintained.
Risk warning: Industry demand falls short of expectations; increased competition may lead to a decline in product prices and profits; the company's positive new business continues to lose money.