中创新航(03931) - 2024 - 中期财报

Company Information Management Discussion and Analysis Industry Overview Driven by global carbon neutrality goals, the new energy industry is rapidly expanding, with significant year-on-year growth in power battery installations and energy storage lithium battery shipments in H1 2024 - Global investment in clean energy is projected to exceed $2 trillion in 2024, driving new energy industry development[7] - From January to June 2024, global new energy vehicle power battery installations reached 364.6 GWh, a year-on-year increase of 22.3%[8] - From January to June 2024, China's new energy vehicle sales reached 4.944 million units, a year-on-year increase of 32%, with a penetration rate of 35%[9] - In H1 2024, global energy storage lithium battery shipments increased by approximately 35% year-on-year; China's market shipments were 116 GWh, a year-on-year increase of 41%[13] Power Battery Market Driven by carbon neutrality goals, the global new energy vehicle market's penetration rate is rapidly growing, boosting power battery demand, with global installations increasing by 22.3% year-on-year in H1 2024 Energy Storage Market The global energy storage market entered a high-growth phase in 2024, with H1 global lithium battery shipments increasing by approximately 35% year-on-year, driven by rapid growth in China and large-scale projects in Europe and America Business Review In H1 2024, the company achieved significant results in technology, products, and market performance, including breakthroughs in high-voltage materials and solid-state batteries, launching leading products for various vehicle and energy storage markets, and securing the world's largest energy storage battery order Technological Breakthroughs In H1 2024, the company achieved multiple technological breakthroughs across advanced materials, high-performance and novel battery technologies, and advanced manufacturing, including 5V high-voltage materials, 6C ultra-fast charging, and 400Wh/kg hybrid solid-liquid battery industrialization, holding 3,438 authorized patents - Key technological breakthroughs in advanced materials include 5V high-voltage lithium nickel manganese oxide, new ultra-fast charging silicon-carbon materials, and all-solid-state electrolyte materials[18] - In high-performance battery technology, the company completed 6C ultra-fast charging high-nickel cylindrical cell development and made progress in high-manganese lithium iron phosphate battery technology[22] - For novel battery technologies, 400Wh/kg high-energy density, high-safety hybrid solid-liquid battery products entered the industrialization phase[22] - As of June 30, 2024, the Group had 3,438 authorized patents and another 746 pending authorizations[21] Product Leadership The company launched several market-leading products, including 800V 5C ultra-fast charging LFP batteries and 400Wh/kg semi-solid-state batteries for passenger vehicles, full-scenario solutions for commercial vehicles, and the mass delivery of 314Ah cells and 6.25MWh+ liquid-cooled containerized energy storage systems for the energy storage market - Passenger vehicle products include 800V 3C/5C batteries capable of 80% charge in 10 minutes, and ultra-high energy density semi-solid-state batteries with energy density exceeding 400Wh/kg[25] - Commercial vehicle products cover 30-600 kWh full-scenario demands, meeting various operating conditions for light trucks, heavy trucks, and construction machinery[28] - In the energy storage market, 314Ah cell products achieved mass delivery, and the new generation 20-foot energy storage container reached 6.25MWh+ capacity, leading the industry[31] Performance Achievements During the reporting period, the company's total assets grew to CNY 111.263 billion, with revenue increasing by 1.4% to CNY 12.469 billion, driven by significant year-on-year growth in hybrid and commercial vehicle installations, substantial increases in energy storage shipments, and accelerated international expansion - Passenger vehicle market: Hybrid vehicle installations increased by 155% year-on-year, securing new project nominations from international clients including Toyota, Volkswagen, and Ford[35] - Commercial vehicle market: Domestic installations increased by 125% year-on-year, achieving full coverage of mainstream products and bulk delivery to strategic clients[34] - Energy storage market: Shipments continued to grow significantly, with 314Ah cell products achieving mass delivery and securing the world's largest energy storage battery order[37] Future Outlook The company will adhere to its "dual-driven power and energy storage" and "dual domestic and international circulation" strategies, focusing on continuous technological innovation for industrialization of advanced battery products, deepening domestic client cooperation, expanding into international and emerging markets, and advancing global industrial layouts - Adherence to the "dual-driven power and energy storage" business strategy and "dual domestic and international circulation" regional strategy[40] - Technology and product innovation: Committed to the industrialization of 5C ultra-fast charging LFP batteries, 6C ultra-fast charging high-nickel cylindrical batteries, and 400Wh/kg solid-liquid hybrid batteries[45] - Market expansion: Deepening domestic passenger and commercial vehicle markets, vigorously developing emerging markets such as energy storage, marine, and rail transit, and fully expanding into international markets[44][47][48] - International layout: Progressing with the Europe Portugal project construction as planned and initiating industrial layout targeting the ASEAN region[49] Financial Review In H1 2024, the Group's revenue increased by 1.4% to CNY 12.469 billion, with profit for the period surging 56.6% to CNY 417 million, and basic earnings per share rising 69.9% to CNY 0.1405, driven by a significant gross margin improvement to 15.6% and 43.2% growth in energy storage system products and other business revenue 2024 H1 Key Financial Data | Metric | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | CNY 12.469 billion | CNY 12.295 billion | +1.4% | | Profit for the Period | CNY 417 million | CNY 266 million | +56.6% | | Basic Earnings Per Share | CNY 0.1405 | CNY 0.0827 | +69.9% | | Gross Margin | 15.6% | 9.6% | +6.0pp | Revenue by Product | Product | 2024 H1 Revenue (CNY thousands) | Revenue Share | 2023 H1 Revenue (CNY thousands) | Revenue Share | | :--- | :--- | :--- | :--- | :--- | | Power Batteries | 9,723,980 | 78.0% | 10,377,467 | 84.4% | | Energy Storage Systems and Others | 2,745,257 | 22.0% | 1,917,245 | 15.6% | | Total | 12,469,237 | 100% | 12,294,712 | 100% | - Revenue from energy storage system products and other businesses saw strong year-on-year growth of 43.2%, primarily due to the company's continued expansion in this business segment[58] - As of June 30, 2024, total assets were CNY 111.263 billion, a 5.5% increase from the beginning of the year; total liabilities were CNY 63.894 billion, an 8.2% increase from the beginning of the year[64][65] - Operating cash flow shifted from a net outflow of CNY 2.725 billion in the prior period to a net inflow of CNY 1.255 billion, primarily due to increased sales collections[66] Corporate Governance and Other Information Corporate Governance and Compliance The company maintains high corporate governance standards, complying with all applicable Code on Corporate Governance provisions during the reporting period, with the only deviation being the combined roles of Chairman and CEO, which the Board believes enhances leadership consistency and decision-making efficiency - The company complied with the Code on Corporate Governance, with a deviation from Rule C.2.1 where the roles of Chairman and Chief Executive Officer are not separated, both held by Ms. Liu Jingyu[81] - The Audit Committee, comprising three independent non-executive directors, reviewed and agreed to the unaudited condensed consolidated financial information for the reporting period[84] Use of Proceeds from Listing The company's H-shares were listed in October 2022, generating net proceeds of approximately HKD 9.98 billion, primarily allocated to new production facility construction, with HKD 654 million remaining unutilized as of June 30, 2024, expected to be fully used by year-end 2024 Use of Proceeds from Listing (As of June 30, 2024) | Item | Percentage of Total Net Proceeds | Unutilized Net Proceeds (HKD millions) | | :--- | :--- | :--- | | Construction of New Production Facilities | 80% | 653.90 | | Research and Development of Advanced Technologies | 10% | - | | Working Capital and General Corporate Purposes | 10% | - | Other Information The Board resolved not to declare an interim dividend for 2024, and neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period, with total employees at 12,286 as of June 30, 2024, and Mr. Li Yunxiang resigning as non-executive director on August 26, 2024 - The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2024[92] - As of June 30, 2024, the Group's total number of employees was 12,286[94] - Executive Directors Ms. Liu Jingyu and Mr. Dai Ying held 1,732,216 and 1,196,820 domestic shares of the company, respectively[99] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the company achieved revenue of CNY 12.469 billion, a 1.4% year-on-year increase; gross profit was CNY 1.948 billion, up 65.2%; profit for the period was CNY 417 million, a significant 56.6% increase; and profit attributable to owners was CNY 249 million, with basic earnings per share of CNY 0.1405 Condensed Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Item (CNY thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 12,469,237 | 12,294,712 | | Gross Profit | 1,948,130 | 1,179,065 | | Operating Profit | 658,774 | 364,776 | | Profit for the Period | 417,306 | 266,487 | | Profit Attributable to Owners of the Company | 248,987 | 146,517 | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets were CNY 111.263 billion, a 5.5% increase from year-end 2023, with non-current assets of CNY 79.280 billion primarily in property, plant, and equipment, and total liabilities of CNY 63.894 billion, resulting in net assets of CNY 47.369 billion and net current liabilities of CNY 3.778 billion Condensed Consolidated Statement of Financial Position Summary | Item (CNY thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 111,262,512 | 105,429,034 | | Non-current Assets | 79,279,591 | 73,318,005 | | Current Assets | 31,982,922 | 32,111,020 | | Total Liabilities | 63,893,928 | 59,043,244 | | Current Liabilities | 35,760,642 | 36,821,461 | | Non-current Liabilities | 28,133,287 | 22,221,774 | | Net Assets | 47,368,584 | 46,385,790 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, net cash from operating activities significantly improved to a CNY 1.255 billion inflow from a CNY 2.725 billion outflow in the prior period, while net cash used in investing activities was CNY 8.408 billion, and net cash from financing activities was CNY 8.327 billion, with cash and cash equivalents at period-end totaling CNY 8.996 billion Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Item (CNY thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Generated From (Used In) Operating Activities | 1,254,970 | (2,724,886) | | Net Cash Used In Investing Activities | (8,408,291) | (13,688,636) | | Net Cash Generated From Financing Activities | 8,326,627 | 13,893,847 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 1,173,306 | (2,519,675) | | Cash and Cash Equivalents at End of Period | 8,995,866 | 8,444,794 | Notes to the Condensed Consolidated Financial Statements Note 6. Revenue During the reporting period, the company's total revenue was CNY 12.469 billion, with power battery sales contributing CNY 9.724 billion (78.0%) and energy storage system products and other sales contributing CNY 2.745 billion (22.0%), primarily from Mainland China, which accounted for 98.1% of revenue Revenue by Product Line (For the six months ended June 30) | Product Line | 2024 Revenue (CNY thousands) | 2023 Revenue (CNY thousands) | | :--- | :--- | :--- | | Sales of Power Batteries | 9,723,980 | 10,377,467 | | Sales of Energy Storage Systems and Others | 2,745,257 | 1,917,245 | | Total | 12,469,237 | 12,294,712 | Note 16. Trade and Bills Receivables As of June 30, 2024, total trade and bills receivables increased to CNY 8.420 billion from CNY 6.829 billion at year-end 2023, comprising net trade receivables of CNY 7.309 billion and bills receivables of CNY 1.112 billion, with a bad debt provision of CNY 120 million Trade and Bills Receivables | Item (CNY thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade Receivables (net of provision) | 7,308,565 | 5,071,212 | | Bills Receivables | 1,111,627 | 1,758,094 | | Total | 8,420,192 | 6,829,306 | Note 23. Contingent Liabilities The company faces multiple patent infringement lawsuits from CATL, with ongoing claims related to Patents Two, Six, and Seven totaling over CNY 260 million as of June 30, 2024, though the Board believes these claims lack merit and are unlikely to result in significant economic outflows despite an initial adverse ruling for Patent Two - The company is involved in multiple intellectual property infringement claims with CATL, concerning Patent Two, Patent Six, and Patent Seven[209][214] Contingent Liabilities Related to CATL Claims (As of June 30, 2024) | Related Patent | Claimed Damages (CNY thousands) | Claimed Expenses (CNY thousands) | | :--- | :--- | :--- | | Patent Two | 40,558 | 1,018 | | Patent Six | 130,000 | 500 | | Patent Seven | 92,000 | 300 | - The Directors believe that the claims related to Patent Two, Patent Six, and Patent Seven lack merit, and a proper resolution of these claims is unlikely to result in a significant outflow of economic benefits[214] Definitions and Glossary