The company released its 2023 annual report and 2024 quarterly report, and achieved revenue of 66.304 billion yuan for the full year of 2023, an increase of 5.19% over the previous year; sales of the company's main products bucked the trend, further strengthened the degree of integration, and maintained an increase in holdings rating.
Key points to support ratings
In 2023, the company's net profit to mother decreased by 14.30% year on year: the company released its 2023 annual report and achieved annual revenue of 66.304 billion yuan, an increase of 5.19%; realized net profit to mother of 3.351 billion yuan, a decrease of 14.30% year on year; realized deducted non-net profit of 3,093 billion yuan, a decrease of 22.30% year on year. According to the annual report calculation, 2023Q4 achieved net profit of 338 million yuan, a year-on-year decrease of 62.56% and a month-on-month decrease of 63.61%.
Net profit due to mother for the first quarter of 2024 was 522 million yuan: 2024Q1 achieved net profit of 522 million yuan, a year-on-year decrease of 48.99%; net profit after deducting non-return to mother was 568 million yuan, a year-on-year decrease of 42.97%.
Gross sales margin decreased 4.12 percentage points year over year to 12.10%, and net sales profit decreased 3.99 percentage points year over year to 3.94% year on year.
Sales of main products bucked the trend, and overseas market development efforts increased: in 2023, the company shipped nearly 150,000 tons of cathode precursors (including ternary precursors and cobalt tetroxide, including internal self-supply), up about 31% year on year; shipments of cathode materials were about 95,000 tons, up about 5% year on year; shipments of cobalt products were about 410,000 tons (including contract processing and internal self-supply), up about 12% year on year; nickel products shipped about 126,000 tons (including contract processing and internal self-supply), up about 88% year on year. The company continues to make breakthroughs in customer development in Japan, South Korea, Europe and the US. Its main products have covered global power battery companies such as LGES, Ningde Times, and Volkswagen Guoxuan, and are widely used in electric vehicles such as Tesla, BMW, and Stellantis, and its market position has further improved.
Overseas resource projects are progressing steadily, and resource control and guarantee capabilities have been further enhanced: in 2023, the company's Huayue 60,000 ton hydrometallurgical smelting project achieved steady production; Huake's 45,000-ton high-ice nickel project achieved production; construction of Huaxiang's 50,000 ton nickel sulfate project progressed steadily; preliminary work on the Pomalaa hydrometallurgy project was completed and put into operation; Indonesia's 120,000 ton hydrometallurgy project was basically put into operation at the end of the first quarter of '24; resource control and guarantee capabilities were further enhanced.
valuations
Combined with the company's annual report and quarterly report, considering the intensification of competition for lithium battery raw materials, we adjusted the company's 2024-2026 earnings forecast to 1.85/2.08/2.37 yuan (the original forecast diluted earnings per share was 3.26/3.88/- yuan), corresponding to a price-earnings ratio of 15.9/14.2/12.4 times; maintaining an increase in holdings rating.
The main risks faced by ratings
Demand for new energy vehicles and 3C batteries fell short of expectations; global cobalt and nickel mining and launch progress exceeded expectations; price competition exceeded expectations; overseas operations and exchange rate risks.