Sinomine(SZ:002738) AVIC Securities·2024-11-01 10:37Investment Rating - The investment rating for the company is "Accumulate" [3] Core Views - The report indicates that the decline in lithium prices has been largely accounted for, and occasional factors have impacted profitability [3] - The company's revenue for the first three quarters of 2024 was 3.57 billion yuan, a year-on-year decrease of 28.7%, with a net profit attributable to shareholders of 546 million yuan, down 73.6% year-on-year [3][7] - The report suggests that the current revenue reflects the significant impact of falling lithium prices, and companies with integrated upstream resources and lithium salt production capabilities are expected to benefit from cost advantages [3][5] Summary by Sections Performance Overview - The company achieved a revenue of 3.57 billion yuan in the first three quarters of 2024, down 28.7% year-on-year, and a net profit of 546 million yuan, down 73.6% year-on-year [3][7] - In Q3 2024, the company reported revenue of 1.15 billion yuan, a decrease of 18.3% year-on-year and 11.4% quarter-on-quarter, with a net profit of 72.76 million yuan, down 87.2% year-on-year and 66.4% quarter-on-quarter [3][10] Lithium Price Impact - The decline in lithium prices has significantly affected the company's revenue, with the average price of lithium carbonate falling approximately 68% year-on-year by Q3 2024 [3][10] - The report notes that the average price of lithium carbonate was around 75,740 yuan per ton as of September 30, 2024, down from over 500,000 yuan per ton at the beginning of 2023 [3][10] Sales and Production - The company’s self-owned Bikita lithium mine achieved a sales volume of 11,114 tons in Q3 2024, with total sales from self-owned mines reaching approximately 28,000 tons in the first three quarters [3][5] - The report highlights that the company is expected to further reduce production costs through the use of lithium sulfate [3][5] Profitability Trends - The company's gross margin and net margin for the first three quarters of 2024 were 35.5% and 15.2%, respectively, both showing significant declines year-on-year [3][10] - In Q3 2024, the gross margin was 22.5%, down 22.3 percentage points quarter-on-quarter, primarily due to the decline in lithium prices [3][10] Future Outlook - The report anticipates that the decline in lithium prices has been largely reflected in the company's current revenue, and a relative narrowing of price declines may support the profitability of the company's main business [3][5] - The company is expected to benefit from its integrated operations and cost advantages in the future [3][5]