performance

The company publishes its 2023 annual report and 2024 quarterly report. The company achieved revenue of 17.3 billion yuan, or -39.79% year on year; realized net profit of 527 million yuan, or -52.93% year on year; deducted non-net profit of 466 million yuan, or -52.44% year on year. Among them, Q4 of '23 achieved revenue of 4.188 billion yuan, or -31.2% month-on-month; net profit to mother of 115 million yuan, -49.61% YoY, -27.2% month-on-month; and deducted non-net profit of 97 million yuan, or -52.79% YoY and -31.2% month-on-month. It is proposed to distribute a cash dividend of 7 yuan for every 10 shares to all shareholders. The company's sales volume of lithium battery cathode material products was 72,100 tons, including 34,600 tons of lithium cobalate, +4.15% year over year; sales volume of ternary materials was 37,400 tons, -19.39% year over year. In addition, the company sold 3,716 tons of hydrogen materials, -7.66% year over year.

The company's Q1 revenue in 2014 was 3.299 billion yuan, -8.02%; net profit to mother was 111 million yuan, -3.71% year over year; deducted non-net profit of 103 million yuan, +4.28% year over year.

The company is number one in the lithium cobalate shipping industry, leading the development of the industry with leading technology. According to Xinyi information, domestic lithium cobalate production in 2023 was 78,700 tons, +2.2% over the same period last year.

The company sold 34,600 tons of lithium cobalate in 2023, +4.15% year-on-year, ranking first in the industry.

As a leading domestic lithium cobalate company, the company leads the development of the industry with its technical advantages. In terms of high-voltage lithium cobalate, the company improved the performance of the material from the two aspects of increased energy density of lithium cobalate above 4.5V and fast charging performance, and gradually solved the problems of deteriorating properties such as high temperature circulation and safety of lithium cobalate materials above 4.5V. 4.5V lithium cobalate products have been mass-produced and supplied, and 4.53V lithium cobalate has been certified by many customers and is in the small-batch production stage. In terms of high-power lithium cobalate, in response to the demand for high-energy density, high-rate lithium cobalate cells for small drones, etc., the company relied on the strong technical accumulation of high-voltage lithium cobalate and developed high-voltage high-rate lithium cobalate one after another, significantly improving energy density and maintaining excellent ratio and safety performance.

The company focuses on key high-voltage product technology of ternary materials, empowering new fields of low-altitude economic applications. The company focuses on the development of key product technology for ternary materials. 1) On the premise of ensuring performance, the company's newly developed Ni6 series 4.45V high-voltage ternary material has further reduced the nickel content, and the cost performance ratio has been improved. The product has been finalized and is being tested; 2) In terms of high nickel ternary, the Ni8 series has undergone production line amplification verification; the Ni9 series ultra-high nickel ternary material has been successfully certified by overseas vehicle manufacturers; 3) In terms of ternary materials in the drone field, high-power high-voltage ternary products developed for low-altitude aircraft and drones have been mass-produced, and the monthly sales volume continues to grow by hundreds of tons.

Investment advice

We expect the company's net profit from 2024-2026 to be 6.11/85/ 1,143 billion yuan, respectively, corresponding to 25, 18, and 13 times PE. Based on the fact that the lithium cobalate business continues to rank first in shipment volume and that the new three-yuan product has been mass-produced and covered for the first time, giving it a “buy” rating.

Risk warning

Demand for new energy vehicles fell short of expectations; downstream market growth fell short of expectations; raw material prices rose sharply; industry competition intensified; customer expansion fell short of expectations, etc.