Core views

Everweft Lithium Energy released its 2024 semi-annual report: during the reporting period, the company's revenue was about 21.66 billion yuan, about -6% year on year, net profit to mother was about 2.14 billion yuan, about -1% year on year, and net profit after deducting non-return to mother was about 1.5 billion yuan, or about +19% year on year.

Energy storage performance was steady in the first half of the year, and consumption performance was impressive. Looking at revenue split, power battery revenue in the first half of the year was about 8.99 billion yuan, about -26% year on year, energy storage battery revenue was about 7.77 billion yuan, about +10% year on year, and consumer battery revenue was about 4.85 billion yuan, about +30% year on year. The gross margin of power in the first half of the year was about 11%, about -3 pct year on year, the gross margin of energy storage was about 14%, about -1 pct year on year, and the gross consumer margin was about 28%, and about +7 pct year on year.

Power shipments increased, leading the market share. Although the company's power revenue declined in the first half of the year, shipments continued to grow. In the first half of 2024, the company's power battery shipments were about 13.5 GWh, an increase of about 7% over the previous year. In the first half of 2024, the company ranked second in the loading volume of new energy commercial vehicles, with a market share of about 13.6%, and ranked second in the installed capacity of electric heavy trucks in China, with a market share of 16.4%.

Energy storage shipments have increased rapidly, and the share continues to rise. Energy storage revenue growth remained steady in the first half of the year, mainly due to the high increase in the company's energy storage shipments. In the first half of 2024, the company's energy storage battery shipments were about 21.0 GWh, an increase of about 133% over the previous year. In the first half of 2024, the company ranked second in the world in energy storage cell shipments, which is one place ahead of the full year of 2023.

Consumption is highly competitive and is expected to continue growing. The company is in a leading position in the consumer sector, with obvious competitive advantages. Lithium batteries have maintained a good trend, small lithium-ion batteries have achieved breakthroughs, and cylindrical batteries are fully produced and sold. Consumer battery revenue increased by about 30% in the first half of 2024, and it is expected that the momentum of growth will continue in the future.

Investment advice

The company's power energy storage market share is high, shipments continue to grow, the consumer sector is highly competitive, and has the momentum for continuous growth. We are optimistic about the company's continued development in the future. The company's revenue for 2024-2026 is estimated to be 55.1/64.3/75.3 billion yuan, respectively, and net profit to mother is 4.7/5.7/6.7 billion yuan, respectively. According to the closing market value on September 20, 2024, PE is 14/11/10 times, respectively, giving the company a “buy” rating for the first time.

Risk warning

The risk that the price of upstream raw materials will rise too fast, the risk that downstream demand will fall short of expectations, the risk of support policy adjustments related to lithium batteries, the risk of geopolitical and trade friction, and the risk of exchange rate fluctuations.