Deeply involved in the field of lithium battery anode materials, performance declined in 2023 and 24Q1. Sinde New Materials is deeply involved in the R&D, production and sale of lithium battery anode coating materials. The main products are anode coating materials, and by-products are rubber plasticizers and pyrolysis naphthalene fractions. 2023 performance: The company achieved revenue of 949 million yuan, +4.99% year-on-year, and net profit attributable to shareholders of listed companies was 41.2955 million yuan, -72.28%. The main reasons for the decline in performance were: (1) increased market competition, and the company lowered prices to increase market share, leading to a decrease in gross profit; (2) large raw material inventory in the first quarter, which led to a high cost of negative coating material products and an increase in main business costs; (3) inventory depreciation of 307.26,600 yuan.
2024Q1 performance: The company achieved revenue of 134 million yuan, -14.73% year over year, net profit attributable to shareholders of listed companies of 118.506 million yuan, or -141.61%. The main reasons for the loss were: (1) 24Q1 medium- and low-temperature shipments were relatively high, while inventory price reduction preparations were calculated for some medium- and low-temperature products at the end of 23; (2) due to the Spring Festival holiday, downstream demand was low, and overall shipments were not high; (3) Q1 companies mainly removed inventory, and the overall capacity utilization rate in the first quarter was low, and the scale effect was not fully utilized.
Promote Chengdu Yutai's technical reform and build cost advantages in an integrated manner. The company's Chengdu Yutai production base has completed technical transformation, increasing production capacity to 30,000 tons. The company currently has a production capacity of 70,000 tons, of which 60,000 tons have been integrated, with an integration ratio of over 85%. Of the 40,000 ton production capacity in Dalian, the production capacity of at least 30,000 tons has been integrated, and Yutai's production capacity of 30,000 tons has all been integrated. The company has built a cost advantage through an integrated production capacity layout. In addition, the Chengdu Yutai base also has obvious cost advantages in terms of raw material procurement, manufacturing costs, and transportation costs, based on regional geographical advantages. The company shipped 31,300 tons of anode coating materials in 2023, -2.72% year-on-year, and we expect to ship 60,000 tons in 2024.
Actively adjust sales strategies to further increase market share. Competition in the industry intensified in 2023, and the company actively adjusted its marketing and sales strategy, lowered the price of medium and low temperature anode coating materials, and further increased its market share. In 2024, the company will continue to increase its market expansion efforts and sales efforts to actively seize market share. In the field of fast charging, as an industry technology leader focusing on high-end anode coating materials, the company pays close attention to changing trends in fast charging technology and market demand, and actively develops new products to meet customer needs.
Profit forecasting and valuation. We expect the company's net profit to be RMB 102 million, RMB 149 million and RMB 211 million respectively in 2024-2026. The company is a leading company in anode coating materials with a steady operating capacity. We expect that as the company's market share increases and downstream demand gradually recovers, the company's performance will gradually recover, and the company will actively expand the development of asphalt-based fibers, fast charging materials, etc., which is expected to provide new impetus for the company's performance growth. Considering the valuation level of comparable companies and the company's future growth potential, we gave the company a 38-40 times PE valuation in 2024, with a corresponding reasonable value range of 38.01 to 40.01 yuan. For the first time, coverage gave it a “superior to the market” rating.
Risk warning. Downstream demand fell short of expectations, raw material prices and exchange rates fluctuated abnormally, and capacity construction and new technology development fell short of expectations.