Core views

The company's revenue for the first three quarters of 2024 was 11.323 billion yuan, -39% YoY, 0.116 billion yuan YoY, -81% YoY, of which 2024Q3 revenue was 4.436 billion yuan, -22% YoY, +39% month-on-month, net profit 0.106 billion yuan, -55% YoY, +123% month-on-month. In the first three quarters of 2024, the company's main product sales volume was 0.0913 million tons, up 21.25% year on year. 2024Q3 earned a profit of 0.0029 million per ton, +0.0012 million month-on-month. If strategic business investment of 0.046 billion yuan is excluded, the ternary cathode business achieved a profit of 0.165 billion yuan, corresponding to an operating profit of 0.0045 million per ton, a significant improvement over the previous month.

occurrences

The company released its 2024 three-quarter report.

Revenue for the first three quarters of 2024 was 11.323 billion yuan, -39% year-on-year, net profit to mother 0.116 billion yuan, -81% year-on-year, or -84% after deducting 0.089 billion yuan.

Among them, 2024Q3 revenue was 4.436 billion yuan, -22% YoY, +39% month-on-month, net profit to mother 0.106 billion yuan, -55% YoY, +123% month-on-month, and 0.093 billion yuan after deduction, -61% YoY and +168% month-on-month.

Brief review

In terms of sales, the company's main products sold 0.0913 million tons in the first three quarters of 2024, an increase of 21.25% over the previous year, of which:

On a quarterly basis, 2024Q3 products sold 0.0364 million tons, up 31.41% month-on-month. Among them, Sanyuan's global market share was 14.4%, up 4 pcts month-on-month, and continued to rank first in the world since 2022.

By region, overseas customers in Europe, America, Japan and South Korea sold nearly 0.015 million tons in the first three quarters, an increase of more than 500% over the previous year, accounting for 16%.

In terms of products, sales of ultra-high nickel products above the 9 series in the first three quarters exceeded 0.02 million tons, +250% over the same period, accounting for 22%; the precursor 2024Q3 achieved sales volume of nearly 10,000 tons, an increase of 13% year on year and 69% month on month, and shipments reached a record high.

In terms of profitability, we estimate a net profit of 0.0029 million per ton in 2024Q3, +0.0012 million month-on-month. If the strategic business investment of 0.046 billion yuan is excluded, the ternary cathode business achieved a profit of 0.165 billion yuan, corresponding to a single-ton operating profit of 0.0045 million, a significant month-on-month improvement, mainly benefiting from increased overseas share, product structure optimization, and capacity utilization.

In terms of new products, shipments of lithium manganese-iron phosphate products increased by more than 100% year-on-year, and continued to have the highest market share in the industry. The company's lithium manganese-iron products are in the first position among many customers, and have already obtained orders for thousands of vehicles from leading power battery companies. EV products are being verified in various high-end models, and are expected to gradually increase in 2025. Layered oxides and polyanionic materials for sodium electric products have achieved many technical breakthroughs, leading the industry in comprehensive performance. A variety of power and energy storage end products have completed card positions and continued to be delivered on a small scale to leading customers at home and abroad.

In terms of overseas factories, the company's first phase of production of 0.02 million tons/year of ternary materials at its Korean base continued to climb, and is expected to reach full production and sales in Q4. In order to meet the needs of customers in Europe, America, Japan and South Korea, the company is speeding up the construction of the second phase of the 0.04 million tons/year material production capacity project in Korea.

Profit forecast: The company's net profit for 2024-25 is expected to be 0.27 and 0.67 billion yuan, corresponding to 70.4 and 28.5 times PE.

Risk analysis

1) Downstream NEV production and sales fall short of expectations: the sales side may be affected by weak demand and fall short of expectations; the production side may be affected by large fluctuations in upstream raw material prices, power restrictions, etc., which in turn affects the company's related business shipments and profitability.

2) The rise in raw material prices exceeded expectations: Since 2021, raw material prices have fluctuated greatly in stages. High prices and instability have had a certain impact on terminal demand, while at the same time disrupting the company's short-term performance.

3) The company's key projects fall short of expectations: As a participant in the new energy circuit, the promotion of key projects is the key to supporting revenue and profit, and is also a reflection of the company's growth. Failure to advance key projects as expected will affect current and long-term performance.