Description of the event

The company released the 2024H1 performance report. The company achieved operating income of 2.264 billion yuan, a year-on-year increase of 1.32%, achieved net profit of 0.069 billion yuan, a year-on-year increase of 155.44%, and realized deducted non-net profit of 0.088 billion yuan; after splitting into Q2, the company achieved a net profit of 0.046 billion yuan, an increase of 91.41% month-on-month, and realized a net profit of 0.056 billion yuan.

Incident comments

With 2024H1, the company shipped 0.0921 million tons of anodes and confirmed receipt of 0.0884 million tons, increasing 52.86% and 53.09%, respectively, mainly benefiting from the increase in order demand from major customers; the production capacity side company currently has a production capacity of 0.237 million tons of finished graphite anode products and a production capacity of 0.0938 million tons under construction; in terms of profit, the company's 2024H1 gross profit estimate for a single ton increased by 23H2 month-on-month, mainly due to the consumption of high-priced inventory raw materials and after the new base was put into operation The proportion of graphitization self-supply has increased, and graphitization costs have decreased (with the implementation of mobile graphitization technology at the Gui'an base, graphitization costs are expected to decrease). In terms of other profit and loss, other income was 0.047 billion yuan, mainly government grants of 0.032 billion yuan, tax credits of 0.014 billion yuan, and asset impairment of 0.016 billion yuan.

Split to Q2, the gap between the company's shipment and acceptance is mainly due to increased demand from end customers, extended storage time, and slight deviation from the overall production schedule. The main reason is that downstream battery manufacturers advance the storage inspection of anode products, causing the storage pace to lag behind, causing the shipping side to be smaller than the scheduled production side. The company's Q2 inventory was 2.3 billion yuan, mainly due to this increase over Q1. In terms of profit, the company's negative operating profit per ton (plus profit and loss of minority shareholders and real interest on Shenzhen Venture Capital's actual shares) is estimated to have increased month-on-month. On the one hand, it is due to an increase in the company's operating rate, and on the other hand, due to the commissioning of the company's Gui'an base. The increase in graphitization self-supply ratio and cost reduction jointly supported the upward trend in profits.

Looking ahead to the second half of the year, the Q3 company's production schedule remains strong and continues to be at full production. Considering the impact of the Q2 shipping delay, H2 shipments are expected to continue to increase; in terms of production capacity, the Qujing Joint Venture Base and the participating company's graphitization plans have implemented additional production capacity, driving the graphitization self-supply ratio to rise further. On the demand side, the company binds large domestic and foreign customers. In terms of product structure, the company's fast charging orders from major customers are growing rapidly. As terminal demand continues to pick up, the company's capacity utilization rate is expected to continue to operate at a high level.

In terms of profit, the company's net profit per ton of operations picked up markedly in Q2, the Q3 operating rate further increased, product prices remained stable, and 2024H2 profit per ton is expected to continue to rise. The company is expected to achieve net profit of 0.35 billion yuan to mother in 2024, and continues to recommend.

Risk warning

1. Market competition increases risk;

2. The risk that demand in the power battery industry falls short of expectations.