Event: The company released the 2024 semi-annual results forecast. 2024H1 achieved net profit of 0.767-0.899 billion yuan, a year-on-year increase of 75.0% to 105.0%, and realized net profit without return to mother of 0.738-0.87 billion yuan, an increase of 99.8% to 135.4% year-on-year. On a quarterly basis, 2024Q2 achieved net profit of 0.449-0.58 billion yuan, a year-on-year increase of 40.8%-82.1%, and the 2023Q2 company's exchange earnings of 0.262 billion yuan led to a high base. After deducting the impact on exchange earnings, 2024Q2's net profit to mother increased 31.5%-70.0% year-on-year. 2024Q2 achieved net profit of 0.459-0.591 billion yuan, -25.5% to -4.2% year over year, up 64.6%-111.8% month-on-month. After deducting the impact of exchange earnings, 2024Q2's net profit without return to mother increased 29.5% to 66.6% year on year. The performance surpassed market expectations.
Q2 Power business shipments doubled year-on-year by 6 GWh, and unit losses narrowed. We estimate that the company's 2024Q2 power battery shipments (including energy storage) reached 6 GWh, doubling year-on-year and increasing by 50% month-on-month, mainly benefiting from the continuous volume of major customers such as Ideal, Dongfeng, and Zero Run. We expect the company's power subsidiary's net loss for 24Q2 to be about 0.4 billion yuan, which is basically flat from month to month. The net loss per unit is 0.067 yuan/Wh, which has narrowed somewhat from month to month. 2024H1's power battery (including energy storage) shipments reached 10 GWh. We expect the annual shipment volume to reach 20-25 GWh, and the power business is expected to continue to reduce losses as the operating rate increases.
LithiumWei helps the consumer business profit increase rapidly, and Vietnam lays out new production capacity to help internationalize. We estimate that the company's consumer battery subsidiary Lithiway 2024H1 contributed more than 0.5 billion yuan to net profit, of which 24Q2 contributed about 0.3 billion yuan to net profit, an increase of 50% over the previous month. We expect the company's 24Q2 mobile phone pack cell self-supply rate to reach 40%, an increase of 5 pcts compared to 24Q1. The company's consumer cells have benefited from increased utilization rates and low-cost raw materials, and net interest rates have continued to rise, helping the company's performance exceed expectations. The company announced that it plans to invest 2 billion yuan to establish Vietnam Lithiwei and invest in the construction of a factory to serve international customers and expand overseas business.
Investment advice: The company's consumer business volume and profit will increase, and the amount of dynamic savings will continue. We expect the company to achieve net profit of 1.61/2.102/2.453 billion yuan in 2024-2026, +49.6%/+30.6%/+16.7% compared to the same period last year, corresponding EPS of 0.86/1.13/1.32 yuan, maintaining a “buy” rating.
Risk warning: consumer demand falls short of expectations; power shipments fall short of expectations; industry competition intensifies.