Incident: The company released its 23-year performance forecast. Net profit from 23 to mother was 0.9-110 million yuan, down 91-93%; net profit from non-net profit was 0.85 to 105 million yuan, down 92-93%, of which Q4 net profit was 0.52 to 0.52 billion yuan, down 1-29%; deducted non-net profit of 0.4 to 64 million yuan, down 75-83%, and 16-42%, in line with market expectations.

Shipments increased by about 8% in 23Q4, and shipments are expected to increase by 40% in '24. On the shipping side, we expect the company to ship about 34,000 tons of three-yuan cathodes in '23, a year-on-year decrease of 20% +. Of these, Q4 shipments are expected to be around 11,000 tons, an increase of about 8% over the previous month, and sales of the 6 Series and 8 Series will increase significantly.

As downstream demand recovers, we expect the company's shipments to reach 45,000 tons in 24, an increase of 40%. In addition, sodium electrocathodes have been used in vehicles, and mass shipments are expected in 24; high-capacity lithium-manganese-rich products have been mass-produced, and samples have been successfully delivered to leading downstream customers.

In 23Q4, a single ton deducted 0.5 million yuan/ton of non-profit, which is expected to be maintained for 24 years. On the profit side, we estimate that 23Q4 will deduct non-profit of about 50,000 yuan per ton, a decrease of 30% + over the previous year, mainly due to a drop in the price of lithium and nickel raw materials and a decrease in capacity utilization; we expect to deduct non-profit of nearly 30,000 yuan per ton for the whole of 23, a year-on-year decrease of about 90%. We expect the impact of raw material price fluctuations to decrease in '24, the share of high nickel will further increase, and the non-profit per ton deducted is expected to remain around RMB 0.5-0.6 million.

Profit forecast and investment rating: Considering the decline in raw material prices, we lowered the company's 2023-2025 net profit forecast to 1.00/2.7/360 million yuan (originally estimated at 1.4/53/70 million yuan), -92%/+161%/+32%, corresponding PE is 80x/31x/23x. Considering the imminent release of sodium-ion batteries, we maintained a “buy” rating.

Risk warning: Electric vehicle sales fall short of expectations, and sodium-ion battery progress falls short of expectations