Description of the event
Shanshan Co., Ltd. released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 19.070 billion yuan, a year-on-year decrease of 12.13%, and net profit to mother of 765 million yuan, a year-on-year decrease of 71.56%, after deducting non-net profit of 247 million yuan, a year-on-year decrease of 89.41%. In 2024Q1, revenue of 3.752 billion yuan was achieved, a year-on-year decrease of 15.67%. Net profit to mother was -73 billion yuan, after deducting non-net profit of -73 billion yuan.
Incident comments
Looking at the whole year, in terms of the anode business, the company achieved sales volume of 264,000 tons, an increase of 44.55% over the previous year. The company maintained a higher growth rate than the industry, which is related to the active expansion of domestic and foreign customers. The gross margin of the company's anode business in 2023 was 11.77%, a year-on-year decrease of 10.36 pct. The main reason was overcapacity in the domestic anode market in 2023, competitive incentives, and high price reduction pressure. In addition, it is expected to be related to certain adjustments in the company's customer structure. In terms of the polarizer business, the company sold 140 million square meters of polarizer in 2023, up 10.18% year on year, and the market share is expected to continue to rise; gross margin was 19.52%, down 7.18% year on year, which had a certain impact on fluctuations in industry sentiment. In addition, the company accrued impairment losses of 387 million yuan, credit impairment losses of 55 million yuan, and asset disposal losses of 29 million yuan in 2023.
Looking at the first quarter of 2024, the company's gross margin was 14.2%, higher than 2023Q4 but lower than 2023Q3 and the same period. The main reason is negative operating pressure. Judging from industry data, the negative electrode market share of Shanshan Co., Ltd. remains at a high level, but due to price fluctuations in the industry, it is expected that the price side will still be under pressure. At the same time, the first quarter is an off-season for the industry, and the operating rate also has a negative impact on the cost side, causing a certain amount of profit pressure. In addition, 2024Q1's management expenses were 228 million yuan, and R&D expenses were 204 million yuan, up from month to month; asset impairment and credit impairment were all 0.4 billion yuan.
Looking ahead, the company's anode production capacity continues to expand, the Sichuan base is climbing, and the Yunnan base continues to advance. Furthermore, the company is actively planning a 100,000 ton anode project in Finland to increase overseas expansion. The company is actively developing new anode technology directions such as fast charging, silicon carbon, and hard carbon. At the same time, the company has completed the divestment of businesses such as clothing, finance, charging piles, and Yongshan Lithium in the early stages. Equity shares in the cathode and electrolyte business have also been optimized, and the company's business structure has further improved.
Risk warning
1. Demand for new energy vehicles and energy storage terminals falls short of expectations;
2. Competition in the industrial chain has intensified.