Core Viewpoint - The solid-state battery industry is accelerating, leading to a significant increase in demand for single-walled carbon nanotubes (SWCNTs) as conductive agents, with companies like Tianan Technology achieving substantial output and capacity expansion in this sector [2][11]. Group 1: Market Dynamics - In 2025, Tianan Technology has already achieved a shipment of 1,500 tons of carbon nanotube slurry, with single-walled products accounting for 70% of this volume [3]. - The company expects to increase its single-walled slurry shipments to between 1,500 and 2,000 tons in Q3 2023, with a projected output capacity of 10,000 tons by 2026 [3][11]. - The market for single-walled carbon nanotubes is anticipated to reach a potential scale of $10 billion within five years, driven by their higher profitability compared to traditional products [9]. Group 2: Company Developments - Tianan Technology has established stable partnerships with domestic solid-state battery companies and has also entered international markets, collaborating with QuantumScape in the U.S. [4]. - The company is expanding its production capacity, planning to build a project with an annual output of 450 tons of single-walled carbon nanotubes, with phases set to be completed by the end of 2026 [5]. - Other companies, such as Dao Technology, are also ramping up their production capabilities, with plans to invest in new projects to produce single-walled carbon nanotubes [5][6]. Group 3: Product Innovation - Single-walled carbon nanotubes are expected to see increased usage in solid-state batteries, with their addition rates significantly higher than those of traditional multi-walled carbon nanotubes [7]. - The application of single-walled carbon nanotubes is expanding into emerging fields such as robotics and electronic devices, indicating a broader market potential [8]. - Tianan Technology is also developing a fourth-generation product that combines single-walled and multi-walled slurries, aiming for a lower price point and a target shipment of 10,000 tons by 2025 [10].

Core Insights - The company's Q2 performance met expectations with H1 revenue of 650 million, a year-on-year increase of 1.1%, and a net profit of 120 million, also up 1.1% year-on-year [1] - The company reduced shipments of low-priced first-generation products in Q2, indicating a potential increase in single-wall product volume [1] Financial Performance - Q2 revenue was 320 million, a decrease of 6.1% year-on-year and 4.7% quarter-on-quarter, with a net profit of 60 million, down 5.1% quarter-on-quarter but up 0.8% year-on-year [1] - The gross margin for Q2 was 37%, showing a quarter-on-quarter decrease of 1.8 percentage points but an increase of 3.8 percentage points year-on-year [1] - Operating cash flow turned positive in Q2, with a net cash flow of 80 million, a significant increase of 741% quarter-on-quarter [3] Product and Market Development - The company expects total shipments of first, second, and third-generation products to remain stable at 80,000 to 90,000 tons for the year, with a notable shift in product mix [1] - Single-wall carbon tube shipments are projected to reach 7,000 tons in 2025, with significant growth expected in 2026 [1] - The company is focusing on high-value applications for single-wall carbon tubes in fields such as solid-state batteries, sodium batteries, robotics, and electronic devices, with potential market size reaching billions [2] Profitability and Cost Structure - The average product price increased to 20,000 per ton in Q2, a 3% quarter-on-quarter rise, with a non-GAAP profit per ton of nearly 3,000, up over 10% [2] - The company anticipates maintaining a profit of around 3,000 per ton for its first, second, and third-generation products in the second half of the year, while single-wall products could achieve profits of 10,000 per ton [2] Capital Expenditure and Inventory - Capital expenditure for H1 was 140 million, down 48.2% year-on-year, with Q2 capital expenditure at 80 million, a decrease of 24.7% year-on-year [3] - Inventory at the end of H1 was 220 million, an increase of 8.5% from the beginning of the year [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's Q2 performance met expectations, with a revenue of 650 million yuan and a net profit of 120 million yuan, both showing a year-on-year increase of 1.1% [8] - The company is reducing the shipment of low-priced first-generation products, with significant growth expected in single-wall carbon tubes [8] - The average selling price of products increased by 3% in Q2, with a projected single-ton profit of approximately 3,000 yuan, reflecting a 10%+ increase [8] - The single-wall carbon tubes are anticipated to be applied in new fields such as solid-state batteries, sodium batteries, robotics, and electronic devices, with a potential market size reaching billions of dollars in the next five years [8] - The company has turned positive in operating cash flow, with a significant increase in cash flow in Q2 [8] - The profit forecast for 2025-2027 has been adjusted downwards, but the company maintains a strong growth outlook with a projected net profit growth of 40%/61%/34% for these years [8] Financial Summary - Total revenue for 2023 is projected at 1,404 million yuan, with a year-on-year decrease of 23.75% [1] - The net profit attributable to the parent company for 2023 is estimated at 297.16 million yuan, reflecting a year-on-year decrease of 29.96% [1] - The earnings per share (EPS) for 2023 is expected to be 0.81 yuan [1] - The company’s total assets are projected to reach 5,139 million yuan by 2024, with total liabilities of 2,175 million yuan [9] - The operating cash flow for 2024 is estimated at 276 million yuan [9]