Guotou Securities·2024-04-09 16:00Investment Rating - The investment rating for the company is "Buy-A" with a target price of 50.2 CNY per share, maintaining the rating [1][13]. Core Views - The report highlights a significant increase in Q2 net profit, indicating that the company's integrated layout may help it navigate through cycles [1]. - The company experienced a substantial decline in revenue and net profit for 2023, with total revenue at 32,971.7 million CNY, down 21.16% year-on-year, and a net profit of 4,946.8 million CNY, down 75.87% year-on-year [2]. - The lithium product segment remains the primary revenue contributor, but its revenue decreased by 29.25% year-on-year, while the battery business showed growth of 18.98% [3]. - The company has a leading global position in lithium resource ownership, with a total of 48.04 million tons of lithium carbonate equivalent (LCE) [4]. - The battery business is steadily developing, with advancements in solid-state battery technology and multiple ongoing projects [12]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of 32,971.7 million CNY, a decrease of 21.16% year-on-year, and a net profit of 4,946.8 million CNY, down 75.87% year-on-year [2][16]. - The lithium product segment generated 24,465 million CNY in revenue, accounting for 74.20% of total revenue, with a gross margin of 12.53% [3]. - The battery business generated 7,707 million CNY in revenue, representing 23.38% of total revenue, with a gross margin of 17.96% [3]. Resource and Production Capacity - The company has a total lithium resource ownership of 48.04 million tons LCE, with ongoing projects in various lithium resource types [4]. - Key projects include the expansion of Mt Marion and Cauchari-Olaroz, which are expected to enhance lithium concentrate supply [4]. Future Projections - Revenue projections for 2024-2026 are estimated at 291.33 billion CNY, 359.39 billion CNY, and 422.85 billion CNY, respectively, with net profits expected to be 40.47 billion CNY, 49.69 billion CNY, and 61.04 billion CNY [13][16]. - The report anticipates a gradual recovery in profitability, with EPS projected to increase from 2.01 CNY in 2024 to 3.03 CNY in 2026 [13][15].