THXN(SZ:300390)2024-08-13 09:05Investment Rating - The investment rating for Canmax Technologies is maintained at OVERWEIGHT with a target price of RMB 17.94, reflecting an expected upside of 8% from the closing price of RMB 16.59 as of August 9, 2024 [7][8]. Core Insights - Canmax Technologies reported a significant decline in its financial performance for 1H24, with attributable net profit down 39.26% year-on-year to RMB 835 million, and revenue down 44.09% year-on-year to RMB 3,713 million [2][3]. - The decline in revenue is primarily attributed to a substantial decrease in lithium ore prices, with the average selling price of lithium hydroxide falling 73.8% year-on-year to RMB 92,300 per tonne [3][5]. - Despite the challenges, Canmax's revenue decline was less severe than the drop in lithium ore prices, largely due to capacity expansion efforts [3]. Financial Performance - For 1H24, Canmax's revenue from lithium-ion battery materials decreased by 47.08% year-on-year to RMB 3,316 million, with a gross profit margin of 17.91%, down 12.59 percentage points year-on-year [3]. - The company's projected book value per share (BVPS) for 2024, 2025, and 2026 is RMB 15.74, RMB 17.07, and RMB 19.24 respectively [2]. - The financial outlook shows a recovery in revenue expected in 2025 and 2026, with projected revenues of RMB 11,602 million and RMB 17,671 million respectively [6]. Industry Dynamics - The lithium ore market is currently experiencing oversupply, leading to continued price declines in 1H24, although there are signs of potential capacity cuts from major producers [5]. - The report suggests that while lithium ore prices are expected to remain on a downward trend, the pace of supply-side de-capacity should be monitored as it may lead to improved supply-demand dynamics in the future [5].