Core views
The company's lithium battery anode production capacity in 2023 was 88,000 tons, with a production capacity utilization rate of 76.24%; in 2023, the company's lithium battery anode material sales volume was 1.41 million tons, up 23.84% year on year. According to EVtank data, China's anode material shipments increased 19.40% year on year in 2023. The company's shipment growth rate exceeded the industry mainly due to excellent customer structure and increased product abundance; anode materials achieved operating revenue of 4.52 billion yuan, a year-on-year decrease of 8.86%, mainly due to increased market competition Prices of anode materials are falling rapidly. The company's overseas production expansion layout is leading, and Morocco's 100,000 ton anode material integration project has been launched, which is expected to further enhance the quantitative profit space for anode products.
occurrences
The company achieved revenue/net profit after deduction of 49.1/0.4/0.9 billion yuan in 2023, -7%/-89%/-80%; of these, 23Q4 achieved revenue/net profit to mother/ net profit after deduction of 13.9/100.120 million yuan, -8%/+258%/+2445% YoY, +8%/+43%/+45% month-on-month. 24Q1 achieved revenue/net profit attributable to mother/ net profit excluding net profit of 10.7/0.2/0.3 billion yuan, +2%/+118%/+124% year-on-year, and -23%/-76%/-73% month-on-month.
Brief review
Volume: Shipments increased steadily in 23, and the overseas layout is expected to increase market space 1) Capacity side: In 2023, the company's lithium battery anode production capacity was 188,000 tons, the output in 23 was 144,000 tons, and the capacity utilization rate was 76.24%. Overseas parties plan to invest 5 billion yuan to implement an integrated lithium-ion battery anode material integration project with an annual output of 100,000 tons in Morocco. The construction is divided into two phases. The production capacity plans for the first phase and phase II lithium-ion battery anode materials are each 50,000 tons/year, and the construction period is expected to be 24 months each.
2) Sales side: In 2023, the company shipped 1.41 million tons of lithium battery anode materials, an increase of 23.84% over the previous year, mainly due to the increase in downstream NEV sales. Sales are expected to be around 45,000 tons/38,000 tons in 23Q4/24Q1. The month-on-month decline in Q1 is mainly due to a decline in downstream seasonal demand for new energy vehicles.
Profit: The decline in the price of anode products led to a year-on-year decline on the profit side
1) Gross profit: The company's gross profit margin was 15.5% in 2023, down 4.0pct year-on-year, mainly due to the average price of anode products being 30,500 yuan/ton in '23, down 28% from 42,400 yuan/ton in '22. The gross margin for 23Q4/24Q1 was 22.09% and 17.40%, respectively. The decline in Q1 gross margin was mainly due to a decline in the operating rate and price side.
2) Net profit: Net profit margin of 0.86% in 2023, down about 6pct year on year, mainly due to lower prices of anode products and increased inventory impairment in 23; 24Q1 net interest rate of 2.2%, an increase of about 15 pcts year on year, mainly due to loss in net profit due to inventory impairment in 23Q1. The net profit per ton of operation for 23Q4/24Q1 is estimated to be about 3,000 yuan/800 yuan. The decline in net profit per ton in 24Q1 is mainly due to the decline in product prices and operating rates.
Investment advice: Net profit due to mother is expected to be 2.88, 3.05, and 373 million yuan in 2024, 2025, and 2026, corresponding to PE 24, 23, 19 times, and given an “increase in wealth” rating.
Risk analysis
1) Downstream NEV production and sales fall short of expectations: The sales side may fall short of expectations due to export restrictions and weak demand; the production side may fall short of expectations due to large fluctuations in upstream raw material prices, electricity restrictions, etc., which in turn affects the company's related business shipments and profitability.
2) The decline in raw material prices exceeded expectations: On the one hand, the instability of raw material prices led to a sense of whether to buy or fall downstream, which had a certain impact on terminal demand. At the same time, price fluctuations disrupted the company's short-term performance.
3) The company's key projects fall short of expectations: As a participant in the new energy circuit, the promotion of key projects is the key to supporting revenue and profit, and is also a reflection of the company's growth. Failure to advance key projects as expected will affect current and long-term performance.