Changjiang Securities·2024-05-28 03:31Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - The company's net profit for 2023 was 4.947 billion yuan, a year-on-year decrease of 75.87%, while the net profit excluding non-recurring items was 2.676 billion yuan, down 86.59% year-on-year. In Q4 2023, the company reported a net loss of 1.063 billion yuan, marking a shift to loss compared to the previous quarter [5][6]. - The decline in lithium prices has significantly pressured the company's profitability. The lithium salt production for 2023 was 104,300 tons, an increase of 7% year-on-year, with sales of 101,800 tons, up 5% year-on-year. However, the average selling price dropped by 32% to approximately 240,000 yuan per ton. The gross margin for the lithium salt business was 12.53%, a decrease of 43.58 percentage points year-on-year [5][6]. - The company recorded an asset impairment loss of 1.639 billion yuan for the year, primarily due to high inventory levels and significant price declines in lithium products. The lithium salt inventory at the end of 2023 was 7,240 tons, up 51% year-on-year, while the energy storage battery inventory was 3,286 MWh, an increase of 278% [5][6]. Summary by Sections Financial Performance - In 2023, the total revenue was 32.972 billion yuan, with a gross profit of 4.575 billion yuan, representing a gross margin of 14%. The company incurred a total asset impairment loss of 1.639 billion yuan [11]. - The Q4 gross margin was 1.39%, with a net margin of -17.89%. The company faced high production costs due to low resource self-supply rates and delayed price adjustments for lithium concentrates [6][11]. Production and Sales - The lithium salt production for 2023 was 104,300 tons, with sales of 101,800 tons. The energy storage battery production was 10,616 MWh, with sales of 8,199 MWh, reflecting a year-on-year increase of 56% and 20%, respectively [5][6]. - The average selling price for energy storage batteries was 720,000 yuan per MWh [5]. Future Outlook - Looking ahead to 2024, the company is expected to enter a resource harvest period, with an anticipated increase in self-supply rates and a potential reduction in resource self-supply costs. The company is optimistic about improved profitability as lithium prices stabilize and the pricing mechanism shifts to M+1 [6].