Company announcement: In 2023, the company achieved revenue, return to mother, and deducted non-net profit of 15.34 billion yuan, 1.912 billion yuan, and 1,781 billion yuan, respectively, a year-on-year decline of 0.8%, 38.42%, and a year-on-year decline of 39.82%. In 2024Q1, revenue, return to mother, and deducted non-net profit of 3,034 million yuan, 445 million yuan, and 419 million yuan respectively, a year-on-year decline of 17.97%, a decrease of 36.64%, and a decrease of 38.25%, respectively. The company's negative electrode business has been fully depreciated, and the coated diaphragm business continues to rise rapidly. At the same time, it continues to make breakthroughs in new business development, maintaining a “highly recommended” rating.
Negative inventory impairment affects 2023 results. The decline in performance in 2023 is mainly due to the negative side business being impacted by high-priced inventories. The vast majority of accounts were calculated in the second half of the year, with asset impairment losses exceeding 1 billion yuan, which greatly affected profits in the second half of the year. The anode business lost money in 2023. The 2024Q1 depreciation was about 60 million yuan. It is estimated that the anode inventory has gradually declined to 3.5 billion yuan to 40 billion yuan, and the impairment calculation has basically been completed. The 2024Q1 anode business still has a certain loss, and Q2 profits are expected to improve. In addition to the negative electrode, the company's other major businesses have achieved rapid growth, and the development of the new business composite fluid collector is also leading the industry.
Negative electrode business analysis. The company's revenue from the anode business in 2023 was about 6.61 billion yuan, a year-on-year decrease of 16%, gross margin of about 15%, and a year-on-year decline of 14.5 percentage points. The company shipped about 155,000 tons in 2023, an increase of 11% over the previous year. Competition in the anode industry intensified sharply in 2023, and the price of anode materials fell sharply. The company's anode business experienced a large amount of inventory impairment charges, totaling about 900 million yuan in 2023, mainly due to 1. Downstream customers experienced production cuts and order fluctuations. As a part of the production cycle, anodes also suffered greater inventory losses during order fluctuations. 2. Increased competition in the anode industry and changes in the company's customer structure led to a marked decline in the company's anode unit price. In 2023, it was about 410,000 yuan/ton, a year-on-year decline of about 25%. In 2024, the company's anode business shipped about 31,000 tons in Q1, the same as the previous year. Considering that Q1 still has some impairment charges, the company's anode business still has a certain loss. Q2 is expected to reverse losses as the impact of high-priced inventory is eliminated.
The coating business volume increased rapidly, and the base film business gradually gained strength. In 2023, the company shipped about 5.271 billion square meters of coated diaphragms, an increase of about 21% over the previous year. The company's coating processing market share has exceeded 40%, and the profit per flat rate has exceeded 0.2 yuan, which remains relatively stable. About 270 million square meters of base film were shipped throughout the year, and volume gradually began. The unit profit exceeded 0.3 yuan/square meter, exceeding expectations. Mainly the company's downstream base film customers were mainly consumer battery customers, and the profitability was relatively good. Overall, the profitability of the company's diaphragm business has continued to rise over the years. Ningde Zhuogao's net interest rate has increased to 25%, and its market share has continued to increase, and it has become the company's pillar business.
Lithium battery equipment and other businesses are developing well. In 2023, the company shipped more than 10,000 tons of PVDF and achieved net profit of more than 200 million yuan to mother. It still maintained a good unit profit, and other coated products contributed about 150 million yuan in profit. The company's lithium battery equipment business achieved mass order delivery in 2023, and achieved annual revenue of 3.59 billion yuan, an increase of 49.6% over the previous year. In the future, with the development of overseas markets, overseas orders are expected to increase further in 2024.
Profit forecast and investment suggestions: The integrated layout of the company's diaphragm business is beginning to bear fruit, and substrate customers are rapidly expanding; the equipment business is developing to the entire line; and the composite fluid collector business is progressing rapidly. The price of anodes dropped sharply this year, and the company suffered significant inventory losses. The company adjusted its net profit forecast for 2024 to 2.6 billion yuan, maintaining a “highly recommended” rating.
Risk warning: Industry demand falls short of expectations; increased competition may cause product prices and profits to decline;