performance

The company released its semi-annual report. The company's 24H1 revenue was 20.1 billion yuan, up 16.3%; net profit to mother was 0.86 billion yuan, up 12.5%; of these, 24Q2 revenue was 10.8 billion yuan, +15.3%/16.2% year on month, and net profit to mother 0.48 billion yuan, +13.5%/27.9% year on month, after deducting non-net profit of 0.43 billion yuan.

Gross margin has increased, and shipments have grown steadily

The company's overall gross profit margin for the first half of 2024 was 12.77%, +1.67pct year on year; net profit margin was 5.76%, +0.87pct year on year. Among them, Q2 gross profit margin was 12.12%, year-on-year +1.13pct, and -1.4pct month-on-month; net profit margin was 5.87%, +0.75pct yoy, +0.24pct month-on-month. During the reporting period, the company achieved a positive increase in shipments of nickel, cobalt, phosphorus and sodium products. Product sales volume exceeded 0.14 million tons, an increase of 15% over the previous year.

Accelerate the construction of overseas production capacity and continue to improve profitability

The company is accelerating the construction of overseas production capacity. In South Korea, the company and POSCO are promoting an integrated nickel refining and precursor industrial base construction project. The overall project scale can achieve an annual output of 0.05 million tons of nickel refinery and 0.11 million tons of precursor plants, which can produce 1.2 million electric vehicles; in Morocco, the company and AL MADA work together to jointly promote the refining of 0.12 million tons of triglycerides and their supporting raw materials, 0.06 million tons of phosphorus It is a project with materials and 0.03 million tons of black powder recycling capacity to meet the battery material needs of more than 1 million electric vehicles, reaching out to the company's customers in the European and American markets. In terms of profit, the proportion of overseas customers is high and processing costs are stable. As the company's operating rate continues to increase, we believe that the company's profitability is expected to continue to increase.

Investment advice

We adjusted the company's net profit for 2024-2026 to 2.02/2.418/2.87 billion yuan (the original value was 2.354/2.965/3.511 billion yuan), corresponding to 9, 8, and 6 times PE, 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.