performance

The company published its 2024 semi-annual report. 2024H1 achieved revenue of 6.332 billion yuan, -18.89% year over year; net profit to mother of 0.858 billion yuan, or -34.24% year on year; deducted non-net profit of 0.768 billion yuan, or -38.75% year over year. Among them, 2024Q2 achieved revenue of 3.297 billion yuan, -19.71% year on year; net profit to mother 0.413 billion yuan, or -31.44% year on year; deducted non-net profit of 0.349 billion yuan, or -39.33% year over year.

Negative electrode shipments declined year on year, and profitability is expected to improve

In '24, H1's negative electrode shipments were 0.067 million tons, a year-on-year decline, mainly due to the mismatch between supply and demand in the industry. Negative electrode prices continued to decline. In order to guarantee the company's reasonable operating profit, the company's strategy chose to reduce shipments of some low-priced products, and the profit level was under pressure in the short term. In terms of capacity construction, the company continues to promote the construction of an integrated project for high-performance lithium-ion battery anode materials with an annual output of 0.28 million tons in Sichuan. As the company's anode production process and manufacturing costs continue to be optimized and improved, and new products such as silicon-based anodes continue to be released, we expect the company's anode business to improve quarterly.

The diaphragm coating business remained leading. PVDF sales grew rapidly in 2024 H1. The company's coated film sales reached 2.913 billion square meters, accounting for 41.03% of domestic wet diaphragm shipments (7.1 billion square meters) during the same period, and continued to lead the market share. In 2024 H1, the company's PVDF sales volume was 0.0087 million tons, +115.94% year over year. Due to an increase in industry supply, domestic lithium-ion grade PVDF sales prices dropped significantly year-on-year, and sales growth partially hedged the decline in PVDF prices and profits. The production and sales scale of the company's PAA products continues to grow, the customer structure and product application are constantly being optimized and enriched, and the rapid release of carbonized adhesive products has become a new growth point.

Investment advice

Considering the price reduction of the main products and the fierce market competition, we lowered the company's net profit from 24-26 to 1.887/2.489/2.779 billion yuan (the original value was 2.665/3.21/3.809 billion yuan), corresponding to PE 12, 9, and 8 times, maintaining the “buy” rating.

Risk warning

Demand for new energy vehicles fell short of expectations; downstream market growth fell short of expectations; raw material prices rose sharply; industry competition intensified; customer expansion fell short of expectations, etc.