Revenue is under pressure in stages, and net profit increases steadily. 2023H1, the company achieved revenue of 4.887 billion yuan, year-on-year-0.53%; net profit of 84 million yuan, + 15.42%; net profit of 72 million yuan, + 14.37%; gross profit of 12.47%, + 5.15pct; net profit of 2.09%, + 0.37pct. 23H1, the company's revenue declined slightly, mainly due to: 1) the price of battery chips decreased due to the price reduction of silicon materials, resulting in a 1.76% drop in battery revenue compared with the same period last year. 2) affected by the domestic and foreign economic situation and competition in the carbon industry, the demand for graphite electrodes was sluggish, resulting in a 45.37% decline in revenue from graphite electrodes and related products compared with the same period last year. 3) the market situation of lithium anode materials in China showed a downward trend in the first half of the year, which affected the business income of lithium anode materials. 23H1, the company's net profit increased steadily, mainly due to the decline in the price of raw materials and the improvement of the automation level of production lines.

New materials and new energy two-wheel drive, give full play to the synergistic advantages of industrialization. The company firmly adheres to the development strategy of "new energy and new materials". In terms of new energy business, the company focuses on battery business and builds an industry chain of "photovoltaic battery production-photovoltaic station construction-lithium battery production-energy storage". The synergy effect of industrialization continues to appear. In terms of new materials business, the company supports the group's advantages in high-quality coal resources and the foundation of the coal chemical industry, through deep processing of coal tar, through coal-coal tar-pitch-needle coke-ultra-high power graphite "coal-coal tar-pitch-coke / needle coke-lithium battery anode materials" two coal-based carbon materials industry chain, the value of coal coke resources has been increased by hundreds of times, and the advantage of the value chain has been continuously enhanced. 2023H1, the first two major businesses of the company, the revenue of battery chips / graphite electrodes and their related products was 3.471 million yuan respectively, compared with the same period last year, the revenue was-1.76% and 45.37% respectively, and the proportion of revenue was 71.04% and 6.28% respectively. With the further improvement of the follow-up industrial chain construction, the company is expected to continue to give full play to the coordinated advantages of industrialization and enhance the overall competitiveness of the company.

Drawing up more funds to improve the layout of the industrial chain, anode materials and photovoltaic power stations have significant advantages in backwardness. On July 21, 2023, the company issued a fixed increase plan, in which the total amount of funds to be raised will not exceed 2.5 billion yuan, which will be used to invest in the construction of lithium-ion battery anode materials and distributed photovoltaic power station projects, as well as to supplement the company's liquidity. This increase will help: 1) expand the capacity of lithium-ion batteries and promote the upgrading of the company's new energy strategic industry.

The company will increase the production capacity of 60,000 tons / year of anode materials in Qinghai and Nanyang, give full play to the advantages of local green power and low electricity prices, break through capacity bottlenecks, enrich high-performance anode materials products, and enhance the company's overall profitability and market share. 2) increase the installed capacity of the company's photovoltaic power station and further expand the business scale of the photovoltaic power station. As of June 30, 2023, the company has cumulatively completed the installed capacity of 139.67MW, and it is expected that the wind power and photovoltaic grid will be connected to 500MW by the end of 2023. The installed capacity of the project is 150.00MW, which will help the company to achieve the goal of building 3GW scenery clean energy power station during the 14th five-year Plan period and enhance market competitiveness. 3) to meet the needs of the company's business development for liquidity and reduce operating risks.

Investment suggestion: we expect the company's operating income from 2023 to 2025 to be 116.4912,135.40 / 17.441 billion yuan, the net profit to return to the mother is 4.10 Universe 526,830 million yuan, and the corresponding current price PE is 26X/20X/13X. Relying on the two-wheel drive of new materials and new energy, the company has significant synergistic advantages in industrialization and is given a "recommended" rating for the first time.

Risk tips: the risk of fluctuations in the macroeconomic environment, the risk of intensified market competition, and so on.