YONGXING MATERIALS(SZ:002756) Guoxin Securities·2024-11-01 03:00Investment Rating - The investment rating for the company is "Outperform the Market" [2][4][9] Core Views - The company's lithium salt business demonstrates a cost advantage, while the special steel business remains stable [2] - The company reported a revenue of 6.231 billion yuan for the first three quarters, a year-on-year decrease of 35.79%, and a net profit attributable to shareholders of 0.971 billion yuan, down 68.19% year-on-year [5] - The average price of domestic battery-grade lithium carbonate in Q2 and Q3 of 2024 was 105,200 yuan/ton and 79,400 yuan/ton respectively, with a quarter-on-quarter decline of 24.52% in Q3 [5] - The company focuses on product quality improvement rather than volume release in a relatively weak downstream demand environment [5] Summary by Sections Financial Performance - For Q3 2024, the company achieved a revenue of 1.739 billion yuan, a quarter-on-quarter decrease of 20.69%, and a net profit of 0.202 billion yuan, down 32.58% quarter-on-quarter [2][5] - The company’s operating cash flow for the first three quarters was 0.387 billion yuan, a year-on-year decrease of 88.87% [5] - The company’s net profit margin and return on equity (ROE) are projected to decline significantly in the coming years due to falling lithium prices [9] Lithium Business - The company is implementing a sales strategy focused on "leading terminals, high-quality cathodes, and niche segments" and aims to optimize the entire supply chain to reduce production costs [6][7] - The cost of lithium carbonate per ton was only 50,000 yuan in the first half of the year, with a reduction of over 10% year-on-year [6] - The company is actively advancing key projects, including increasing the production capacity of its mining subsidiary from 3 million tons/year to 9 million tons/year [7] Special Steel Business - The company has adjusted its product structure in response to the recovery in energy steel demand, resulting in a significant increase in gross profit per ton of steel [7] - In 2023, over 40% of the company's steel products sold had a gross profit margin exceeding 2,000 yuan/ton [7] Future Outlook - The revenue forecasts for 2024-2026 are adjusted to 8.211 billion yuan, 9.120 billion yuan, and 10.027 billion yuan respectively, with year-on-year growth rates of -32.6%, 11.1%, and 9.9% [9] - The net profit forecasts for the same period are 1.163 billion yuan, 1.280 billion yuan, and 1.595 billion yuan, with year-on-year growth rates of -65.9%, 10.1%, and 24.6% [9] - The company maintains a strong resource advantage and a clear growth path, which is expected to help mitigate the adverse effects of declining lithium prices [9]