occurrences
The company released its 2023 annual report.
In 2023, we achieved revenue of 15.127 billion yuan, -28.9% year-on-year, net profit to mother of 1.924 billion yuan, -14.8% year-on-year, after deducting 1.98 billion yuan, or -14.9% year-on-year.
Among them, 2023Q4 achieved revenue of 2,584 billion yuan, -64.0% YoY, -37.6% month-on-month, net profit of 433 million yuan, -44.6% YoY, -23.5% month-on-month, and 343 million yuan after deduction, -49.4% YoY and -40.0% month-on-month.
Brief review
Volume: Shipments remained flat year on year due to declining share of ternary batteries and downstream storage.
In terms of production capacity, at the end of 2023, the company built 110,000 tons of cathode materials, including 77,000 tons of ternary cathode materials, with an annual effective production capacity of 83,000 tons; the construction of the European New Materials Industry Base project is progressing steadily, and the overall project plan is 500,000 tons, including 200,000 tons of diverse materials and 300,000 tons of lithium iron phosphate (manganese), which will be built in stages. The first phase of the project will build a production line of 60,000 tons of high-nickel multi-material.
In terms of shipment volume, the company shipped 62,700 tons of cathode materials in 2023, -1.2% year-on-year, mainly due to the decline in the installed share of ternary batteries and the impact of downstream battery factories' storage cycle.
On the customer side, the company has established strong partnerships with world-class power battery companies and car companies, including Korea's LG New Energy, SK ON, Japan's AESC, Murata, BYD, Everweft Lithium, and China Airlines.
Benefits: Benefiting from the relatively high share of international customers, the company's profit per ton remains high.
In terms of profit per ton, the company's overseas revenue accounts for 30%, and international customers account for a relatively high share. Based on net profit after deducting net profit and cathode material shipments, the company's net profit per ton is estimated to be 310,000 in 2023, -15% over the same period. This is mainly due to an increase in the share of domestic customers and a decrease in processing costs, but compared with the industry, the company's profitability remains leading.
In terms of non-recurring profit and loss, the company's non-recurring profit and loss in 2023 was -55 million yuan, of which the 2023Q4 company's non-recurring profit and loss was 90 million yuan, which is expected to mainly include government subsidies of 0.3 billion yuan and exchange gains and losses to recover 50 million yuan.
The product layout is diverse, and the development of new cathode materials is leading the industry.
In terms of solid state battery cathodes, the company implemented loading applications, supplying solid state batteries from customers such as Huineng, Qingtao, Weilan New Energy, and Ganfeng Lithium, and loading them in SAIC and VinFast solid-state models.
In terms of sodium electrocathodes, the company's product performance indicators are leading in the industry, shipments have continued to grow steadily, and supply has been achieved at the level of hundreds of tons.
Novel lithium-rich manganese-based: The relevant invention patent has been authorized in Korea, and 100 kg class shipments have now been made to many domestic and foreign head battery customers.
Investment advice: The company's net profit is expected to return to mother in 2024-25 to be 9.3 billion yuan or 1.11 billion yuan, corresponding to 28 or 23 times PE.
Risk analysis
1) Downstream NEV production and sales fall short of expectations, causing the company's product sales to fall short of expectations: the sales side may be affected by changes in the macro environment and weak phased demand; the production side may fall short of expectations by large fluctuations in upstream raw material prices, electricity restrictions, environmental requirements, etc., which in turn affects the company's related business shipments and profitability.
2) Prices of raw materials, such as lithium, have risen more than expected: raw material prices have continued to rise since 2021, while raw material prices have fluctuated greatly in stages. High prices and instability have had a certain impact on terminal demand, and at the same time disrupted the company's short-term performance.
3) The expansion of the company's key projects falls short of expectations. The development needs of the new energy industry. The promotion of key projects is a vehicle for comprehensive competitiveness in production capacity, cost and technology. Failure to expand key projects as expected may reduce the company's competitiveness.