CNGR(SZ:300919) Xin Lang Cai Jing·2025-08-20 23:42Core Viewpoint - The announcement of a share reduction by the chairman of Zhongwei Co., Ltd. coincides with a significant decline in the company's financial performance, indicating deeper issues within the company and the industry as a whole [1][3]. Financial Performance - In the first half of 2025, Zhongwei reported a revenue of 21.32 billion yuan, a slight increase of 6.16% year-on-year, but the net profit decreased by 15% to 733 million yuan [4]. - The company's core business, ternary precursor revenue, plummeted by 15% to 7.49 billion yuan, a 36% drop compared to its peak in 2022 [4]. - The second quarter of 2025 saw a net profit decline of 12%, marking the fourth consecutive quarter of year-on-year decline [1][4]. Market Position - Zhongwei's market share in the ternary precursor segment fell from 27% in 2023 to 20.3% in 2024, reflecting a loss of competitive edge [4]. - The overall production of ternary precursors globally decreased by 1.7% in 2024, while China's production grew by 0.7% [4]. Industry Challenges - The rise of lithium iron phosphate batteries, which captured 81.4% of the market share in the first half of 2025, has severely pressured Zhongwei's reliance on ternary technology [5]. - Major clients like CATL and Rongbai Technology are increasingly producing their own precursors, further squeezing Zhongwei's market position [5][13]. Cash Flow and Debt - From 2021 to the first half of 2025, Zhongwei experienced a net cash outflow of 36.05 billion yuan, averaging a daily loss of 20 million yuan [6][8]. - The company's debt situation is alarming, with a debt-to-asset ratio exceeding 60.6% and total liabilities reaching 28.5 billion yuan, which is 140% of its net assets [8][11]. Operational Efficiency - The gross profit margin for Zhongwei's sales dropped to 12.1% in the first half of 2025, lower than its competitors [7]. - Inventory levels surged to 10.23 billion yuan, accounting for 50.28% of net assets, indicating poor asset turnover [7]. Strategic Missteps - The company's aggressive expansion strategy has not yielded the expected returns, leading to a liquidity crisis with significant amounts tied up in inventory and receivables [14]. - The ongoing expansion amidst declining profitability raises concerns about the sustainability of Zhongwei's business model [14][15].