Financial Services Association, July 10 (Reporter Liu Yue) As the amount of lithium hexafluorophosphate increased and the price of lithium hexafluorophosphate decreased, the performance of polyfluoride (002407.SZ) continues to be under pressure. The company expects net profit to drop by more than 60% year on year in the first half of this year.

This evening, polyfluoride announced that in the first half of 2024, the company expects to achieve net profit attributable to shareholders of listed companies of 60 million yuan to 90 million yuan, a year-on-year decrease of 66.44% to 77.63%.

According to financial data, the company achieved net profit of 39.57 million yuan in the first quarter. Based on this calculation, it is expected to achieve net profit of 20.43 million yuan - 50.43 million yuan in the second quarter.

Regarding the reason for the decline in net profit, Polyfluoride stated in the performance forecast that competition in the new energy industry is intensifying, and demand from downstream customers is lower than expected. Although the company's production and sales scale of lithium hexafluorophosphate, a new energy material product, continued to fall, causing the gross profit of the main business to drop sharply, leading to a decrease in the company's profitability.

According to public information, the main business of polyfluoride is R&D, production and sales in the fields of high-performance inorganic fluorides, electronic chemicals, lithium-ion batteries and materials. In 2023, new energy materials (products include lithium hexafluorophosphate) accounted for more than 40% of revenue.

According to Open Source Securities quoting Baichuan Yingfu data, lithium hexafluorophosphate continued to fall from a high of about 0.6 million yuan/ton, and the price fell below 0.07 million yuan/ton in January this year. Prices remained “sideways” at this low level in the first half of this year.

Going back to the company's historical gross sales margin level, during the last round of decline in the lithium hexafluorophosphate industry, the company's gross sales margin reached a minimum of 7.95% in Q4 2020, while the gross sales margin of Q1 this year was 7.6%, a record low. The company's gross sales margin for Q2 has not been announced, and the performance forecast for the first half of the year may not be much different from Q1.

In fact, due to the sharp drop in the market price of lithium hexafluorophosphate compared to the same period last year, most other lithium hexafluorophosphate companies were also under pressure. For example, Tianci Materials (002709.SZ) expected net profit to drop by about 80% year on year; Tianji (002759.SZ)'s performance changed from profit to loss. The net profit loss for the first half of the year is expected to be 0.115 billion yuan to 0.135 billion yuan; and the loss of Shenzhen Xinxing (603978.SH) increased, and losses of 55 million yuan to 65 million yuan are expected in the first half of the year.

The electrolyte industry is generally under pressure at the bottom of the profit cycle. Tianci Materials said during an investigation by the reception agency in April that after large-scale expansion of production in the electrolyte industry in the previous two years, it is quite obvious that it is lagging behind and overcapacity. Currently, with the exception of leading companies in the industry, they are generally in a state of low operating rate; pure electrolyte processing companies and enterprises with a low degree of integration do not have obvious cost, customer, or scale advantages in production capacity, and have begun to be unprofitable or even lose money. However, in order to maintain a normal production line operating rate level, some manufacturers will still seize the market through low price strategies, and competitive pressure on the industry still exists.

Regarding this year's price forecast, the Polyfluoride reception agency said during research in March that according to current market prices, some companies are already in a state of loss, but they have bottomed out in stages, and are expected to rise steadily throughout the year. The chairman of Tianci Materials said at the company's 2023 annual results meeting that the price of electrolyte is at the bottom level, but supply still exceeds demand. It is expected that profits will return to a reasonable level after the industry experiences backward production capacity.