Core views
The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 6.932 billion yuan, net profit of 43 million yuan, and net profit of non-return to mother of 58 million yuan, down 23.5%, 93.1%, and 89.8%, respectively. The first quarter of 2024 achieved revenue of 1,597 million yuan, net profit attributable to mother of 16 million, and deducted non-net profit of 0.04 billion yuan. Revenue increased significantly month-on-month in the first quarter. Return to mother and deductions were both positive, and gross margin recovered markedly, which is expected to be due to the resumption of demand and increased shipments. Looking ahead to 2024, the company's development direction, which focuses on energy storage, remains unchanged. Demand for large storage is strong, and when demand for household storage recovers, the company's revenue and performance are expected to resume growth.
occurrences
The company released its 2023 annual report and achieved revenue/return/deduction of 69.32/0.43/58 billion for the whole year, which was -23.5%/-93.1%/-89.8% year-on-year respectively. Among them, single Q4 achieved revenue/attribution/deduction of $11.93/-2.32/ -186 million, year-on-year, -53.5%/-225%/-237%, and -12.6%/-990%/-2260% month-on-month.
The company released its 2024 quarterly report, achieving revenue of 15.97/0.16/0.04 billion yuan, respectively, of -36%/-91%/-97% year-on-year, revenue +33.9% month-on-month, and correction of performance due to mother and deducted performance.
Brief review
Q4 Revenue and performance declined significantly from month to month, mainly due to energy storage shipments, failure to meet expectations, and inventory depreciation
The company's previous performance forecast was that due to a sharp drop in the price of lithium carbonate, the upstream material, and due to market competition, the unit price of the company's lithium battery products dropped significantly. Factors such as downstream companies' inventory removal affected demand, thereby affecting revenue and profit; the product price reduction also caused preparations for a large amount of inventory price reduction at the end of the period, which affected profits. In terms of shipment volume, the company's annual energy storage battery revenue is expected to be less than 6 GWh, a year-on-year decline. Among them, Q4 shipments are expected to be 1-1.5 GWh, a significant year-on-year decrease. In terms of price, the price of lithium dropped significantly in Q4 last year. At the end of the year, it fell below 100,000 yuan/t, and the price of energy storage batteries also declined. The average price of the company's Q4 is expected to be less than 0.5 yuan/Wh, and the gross margin is less than 5%. In addition, Q4 assets depreciated by more than 100 million dollars, causing the company to lose a large amount in Q4.
Q1 Revenue, performance, and gross margin increased markedly from month to month due to a recovery in demand and a rebound in shipments
Q1 The company's revenue increased by 33.9% month-on-month, and unequal returns and deductions have been corrected, and gross sales margin reached 11.84%, up 5.26 pcts month-on-month. The increase in gross margin is expected to be mainly due to a decrease in the cost of energy storage batteries and consumer batteries, while prices have entered a relatively stable stage. Q1 energy storage battery shipments are expected to be close to 2 GWh, a significant increase over the previous month. The increase in demand has also contributed to the increase in production capacity utilization, which has a positive effect on the increase in gross margin. The gross margin of Q1 energy storage batteries is expected to be higher than 5%, and it is expected to increase further in the future.
Consumer batteries are booming, and power batteries are expected to resume growth
The company's consumer battery business is expected to generate more than 2 billion dollars in 2023, and the gross margin exceeds that of energy storage batteries. Q1 continues to maintain a high level of prosperity and gross profit margin, and the annual revenue is expected to be close to 3 billion yuan. The company's power battery business declined last year and is expected to resume growth this year.
Balance sheet inventory and fixed assets are still at a high level. Inventory removal and capacity utilization rates are still under some pressure. At the end of 2024Q1, the company's balance sheet inventory account was 3.188 billion yuan, a slight increase compared with the flat rate at the end of 2023Q4, and there will still be some pressure to remove inventory in the future. The fixed asset category reached 5.303 billion yuan, the highest level in history, and there is some pressure on the future capacity utilization rate. However, the construction engineering category has dropped to 629 million yuan, indicating that the company's expansion of production has come to an end.
Investment recommendations and performance forecasts
The company's positioning is energy storage. It is expected that the company's shipments will resume growth against the backdrop of strong global demand for large storage and the end of the household storage and storage removal cycle this year. Shipments are expected to exceed 10 GWh. Power batteries and consumer batteries continued to grow. The company's estimated return results in 2024 and 2025 are 417 million yuan and 550 million yuan, respectively.