In the first half of this year, the price of cathode material decreased compared to last year. Jiangsu Lopal Technology (603906.SH) reduced its net loss in H1 year-on-year. Q2 revenue increased compared to the previous quarter, while profits decreased. However, the gross margin level rebounded.
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Cailian Press August 15th (Reporter Zeng Chuchu): Affected by the decline in the price of cathode material in the first half of this year, Jiangsu Lopal Technology (603906.SH) suffered a net loss in H1, but the net loss decreased year-on-year. Although the gross margin level in Q2 was slightly recovered, the net profit decreased compared to the previous quarter despite revenue growth.
Jiangsu Lopal Technology released a statement this evening saying that the company achieved revenue of RMB 3.569 billion and a year-on-year decrease of 6.44%, and a net loss of RMB -0.221 billion attributable to shareholders of the listed company in the first half of this year. Financial data shows that the company achieved revenue of RMB 2.094 billion in Q2, an increase of 42.03% compared with the previous quarter; net loss reached RMB -0.143 billion, which is an increase of the previous negative net profit of RMB -0.078 billion in Q1.
Looking at the data from Q2 compared to Q1, Jiangsu Lopal Technology seems to have entered a situation where "the more it sells, the more it loses." But from the semi-annual report, it is not due to business reasons. In the second quarter of this year, the company's sales gross margin increased by 8.55% to 13.69% compared to the previous quarter, and the total profit also decreased year-on-year, which was -0.093 billion yuan, but the net profit fell sharply to RMB -0.143 billion.
The semi-annual report did not disclose the specific reasons for Jiangsu Lopal Technology's "the more it sells, the more it loses" in Q2, but Jiangsu Lopal Technology stated that the downstream cost reduction pressure and intensified market competition in the first half of this year caused the processing cost of the cathode material industry to decrease and product gross profit to decline. Furthermore, the falling price of raw materials led to the expected loss of the company's 2024 interim performance.
Jiangsu Lopal Technology's main business is divided into two categories: lithium iron phosphate cathode materials and eco-friendly refined chemicals for automotive applications. In the first half of this year, the revenue proportion of the cathode material products decreased from nearly 75% at the end of last year to less than 70%.
Cailian Press reporter learned from Jiangsu Lopal Technology that as of the first quarter of this year, the domestic production capacity of lithium iron phosphate cathode materials was 0.2425 million tons/year, and other new domestic projects will be put into production according to the market situation. The 0.03 million tons/year lithium iron phosphate production line in Indonesia is now under trial production, and this is the company's only new production capacity this year.
Since the beginning of this year, the price of lithium iron phosphate has continued to decline, and the price of raw material lithium carbonate has declined even more. According to Longzhong Information, the mainstream price of power lithium iron phosphate in the first half of this year was RMB 42,422.13/ton, a year-on-year decrease of 37.87%; the price of battery-grade lithium carbonate decreased by 45.77% year-on-year.
According to Longzhong Information's latest analysis, the spot price of upstream lithium carbonate has continued to decline this week, and the market situation has not shown any improvement. The price of lithium iron phosphate is stable for the time being while the upstream and downstream are deadlocked. Due to the fluctuation of lithium carbonate prices, the price of lithium iron phosphate has fallen, but with the growth of downstream energy storage, the company's operating rate has improved. The lithium iron phosphate market is expected to remain stable in the short term.