Chengxin Lithium(SZ:002240) Huafu Securities·2024-05-20 02:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 20% relative to the market benchmark index within the next six months [10]. Core Views - The company reported a significant decline in revenue and net profit for 2023, with operating income of 7.95 billion yuan, down 34% year-on-year, and a net profit of 702 million yuan, down 87.4% year-on-year [4][5]. - The first quarter of 2024 also showed a decline in performance, with operating income of 1.21 billion yuan, down 56.4% year-on-year, and a net loss of 140 million yuan [4]. - The company is expected to see improvements in profitability as its self-owned lithium resources begin to ramp up production, particularly from the Wood Wool Lithium Mine, which is projected to significantly reduce production costs [4]. - The report highlights the company's overseas smelting capacity expansion, with the Indonesian project expected to commence production in the first half of 2024, marking a significant milestone as the first large-scale lithium salt project invested by a Chinese company overseas [4]. Summary by Sections Financial Performance - In 2023, the company achieved an operating income of 7.95 billion yuan, a decrease of 34% year-on-year, and a net profit of 702 million yuan, down 87.4% year-on-year [4][5]. - The first quarter of 2024 saw an operating income of 1.21 billion yuan, down 56.4% year-on-year, with a net loss of 140 million yuan [4]. Production and Resources - The company produced 56,700 tons of lithium salt in 2023, an increase of 19% year-on-year, while sales volume reached 52,900 tons, up 11.5% year-on-year [4]. - The report notes that the company has sufficient inventory of lithium concentrate, with production of 173,000 tons in 2023, a year-on-year increase of 219.4% [4]. Future Outlook - The company is expected to see a recovery in net profit, with projections of 838 million yuan for 2024, reflecting a 19% increase from the previous year [5]. - The report anticipates that the company's self-owned resources will rapidly increase production, supporting the "Buy" rating [4].