Investment Rating - The report assigns an "Accumulate" rating for the company for the first time [1]. Core Views - The company, Longpan Technology, is a leading global manufacturer of lithium iron phosphate cathode materials and a well-known producer of automotive fine chemicals in China. In the short term, the company is expected to continue facing losses due to a decline in the average market price of lithium iron phosphate, inventory devaluation losses, and impairment of assets and goodwill. However, in the medium to long term, the optimization of product structure and cost reduction measures are anticipated to lead to a reduction in losses or a turnaround to profitability by 2025 [2][3][4]. - The company has signed significant supply agreements with LGES and Blue Oval, which are expected to contribute to incremental profits. The Indonesian plant's production capacity of 120,000 tons of lithium iron phosphate is gradually being released, allowing the company to capture high-priced overseas orders [4][7]. Financial Summary - The company's projected revenues for 2023, 2024E, 2025E, and 2026E are 8,729 million, 7,702 million, 8,980 million, and 13,068 million RMB respectively, with year-on-year growth rates of -38.0%, -11.8%, 16.6%, and 45.5% [6]. - The forecasted net profit attributable to the parent company for 2024, 2025, and 2026 is -663 million, 83 million, and 506 million RMB, indicating a significant turnaround from losses to profits [6][9]. - The company's gross profit margin is expected to improve from -0.7% in 2023 to 23.2% in 2026, reflecting the anticipated recovery in profitability [6][9]. Business Operations - The company has established long-term partnerships with major battery manufacturers such as CATL and LGES, ensuring a stable demand for its products. The domestic market for automotive fine chemicals is also expected to provide steady revenue [7]. - The company is focusing on cost reduction through self-supply of lithium carbonate and iron phosphate, as well as optimizing operational efficiency in various aspects such as energy and raw material costs [7][8].
龙蟠科技：海外产能占优，业绩弹性可期