Core Viewpoint - The company reported a decline in both revenue and net profit for the year 2024, indicating challenges in its operational performance due to falling prices in key products like vanadium and titanium [2][3]. Group 1: Financial Performance - In 2024, the company achieved operating revenue of 13.209 billion yuan, a year-on-year decrease of 8.2%, and a net profit attributable to shareholders of 285 million yuan, down 73.0% year-on-year [2]. - The fourth quarter of 2024 saw operating revenue of 2.735 billion yuan, a year-on-year decline of 15.2% and a quarter-on-quarter decline of 17.5%, with net profit attributable to shareholders at 102 million yuan, down 45.9% year-on-year but up 122% quarter-on-quarter [2]. Group 2: Vanadium Segment - The company produced 54,300 tons of vanadium products (measured as V2O5) in 2024, representing a year-on-year increase of 7.3% [3]. - The average price of V2O5 in China for 2024 was 80,800 yuan per ton, a decrease of 25.9% compared to 109,000 yuan per ton in 2023, leading to a gross margin of 10.4%, down 17 percentage points year-on-year [3]. Group 3: Titanium Segment - The company successfully launched a 60,000 tons/year molten salt chlorination titanium dioxide project, with total titanium dioxide production of 252,900 tons in 2024, a year-on-year increase of 0.8% [4]. - The average price of titanium dioxide (Rutile type) in Southwest China for 2024 was 15,400 yuan per ton, down 1.7% year-on-year, while the gross margin for titanium dioxide was 4.3%, a decrease of 6.3 percentage points compared to 2023 [4]. Group 4: Financial Ratios - The selling expense ratio for 2024 was 5.03%, a decrease of 0.73 percentage points from 5.76% in 2023 [5]. - The company's asset-liability ratio at the end of 2024 was 13.34%, down 4.9 percentage points from the end of 2023 [5]. Group 5: Market Outlook for Vanadium - The company expects a significant increase in vanadium demand for energy storage applications in 2025, with a supply agreement for 20,000 tons of V2O5 signed, indicating a 35% increase from 14,822 tons in 2024 [6]. - The transition of the national standard for ordinary hot-rolled rebar from a recommended to a mandatory standard is expected to improve vanadium demand in the steel sector, with expectations for vanadium prices to gradually rise as inventory is consumed [6].

Core Viewpoint - The report highlights the growth potential of the vanadium flow battery market, driven by increasing project tenders and expected supply agreements, despite current challenges in the vanadium price and steel demand [2][3][5]. Group 1: Project Developments - Multiple vanadium flow battery projects are currently in the bidding phase, including significant projects in Yunnan and Hami, with each project designed for 100MW/400MWh capacity [2]. - The installed capacity of vanadium flow batteries is expected to maintain high growth through 2025, indicating a robust market outlook [2]. Group 2: Financial Performance - The company anticipates a significant decline in net profit for 2024, projected between 260 million to 300 million yuan, representing a year-on-year decrease of 71.6% to 75.4% due to poor demand in the steel sector and a substantial drop in vanadium pentoxide prices [3]. - The average price of vanadium pentoxide in China for 2024 is expected to be 80,800 yuan per ton, down 25.9% from 109,000 yuan per ton in 2023 [3]. Group 3: Supply Agreements and Market Trends - The company has signed a framework agreement to supply 20,000 tons of vanadium raw materials to Dalian Rongke for 2025, marking a 35% increase from the 14,822 tons supplied in 2024, reflecting continued demand in the vanadium flow battery sector [4]. - The total installed capacity of vanadium flow batteries is projected to reach approximately 440MW/1,742MWh in 2024, a significant increase of 700% from 2023 [5]. - The steel sector's demand for vanadium is expected to improve due to the transition of national standards for rebar, which may positively influence vanadium prices as inventory levels decrease [5].

Investment Rating - The report maintains an "Accumulate" rating for the company [6] Core Views - The company is expected to see a significant increase in vanadium battery installations alongside improvements in vanadium demand from the steel sector, suggesting a potential recovery in vanadium prices [1][3] - The company's net profit for 2024 is projected to decline by 71.6% to 75.4% year-on-year, primarily due to weak demand in the steel sector and a substantial drop in the price of vanadium pentoxide [2] - The supply of vanadium for energy storage is expected to grow by 35% in 2025, indicating a robust market for all-vanadium flow batteries [2] Summary by Sections Company Performance - The company anticipates a net profit of 2.6 to 3.0 billion yuan for 2024, a significant decrease from the previous year [2] - The average price of vanadium pentoxide in 2024 is expected to be 80,800 yuan per ton, down 25.9% from 109,000 yuan per ton in 2023 [2] Market Outlook - The installed capacity of all-vanadium flow batteries is projected to grow significantly, with an estimated 440 MW/1742 MWh expected to be connected to the grid in 2024, a 700% increase from 2023 [3] - The demand for vanadium in the steel sector is anticipated to improve due to regulatory changes, which may support a recovery in vanadium prices [3] Financial Projections - The company forecasts net profits of 2.8 billion, 5.2 billion, and 7.0 billion yuan for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 96, 52, and 39 [4] - Revenue is expected to decline from 13.6 billion yuan in 2024 to 14.6 billion yuan in 2025, before reaching 15.4 billion yuan in 2026 [5] Valuation - The report suggests that the current decline in stock price has already reflected the anticipated drop in performance, and with the expected recovery in vanadium prices, the company's products may see a revaluation [4]