Investment Rating - The report maintains a rating of "Buy" for the company [1][5] Core Views - The company's performance is under pressure due to market competition and the bankruptcy of Northvolt, but the acceleration of new lithium battery materials' marketization is expected to improve future performance [3][8] - The company reported a net profit of 472 million RMB for 2024, a decrease of 75.48% year-on-year, with total revenue of 7.593 billion RMB, down 49.80% year-on-year [8][9] Financial Summary - The company’s revenue is projected to recover from 7.593 billion RMB in 2024 to 10.159 billion RMB in 2025, reflecting a growth rate of 33.8% [7] - The adjusted earnings per share (EPS) forecasts for 2025, 2026, and 2027 are 1.35 RMB, 1.68 RMB, and 2.06 RMB respectively, with corresponding price-to-earnings ratios of 27.0, 21.6, and 17.6 [5][10] - The company’s EBITDA is expected to increase from 571 million RMB in 2024 to 993 million RMB in 2025 [7][10] Market Performance - The company's stock has underperformed, with a year-to-date absolute return of -6.4% and a 12-month return of -30.5% [2] - The total market capitalization of the company is approximately 18.45 billion RMB [2]

Investment Rating - The report maintains an "Accumulate" investment rating for the company, indicating a projected increase in stock price relative to the CSI 300 index over the next six months [1][11]. Core Views - The company's performance is under short-term pressure, with a significant decline in revenue and profits for 2024, but there are expectations for recovery in 2025 driven by increasing demand for lithium battery materials [5][6][8]. - The report highlights the growth in China's new energy vehicle sales and battery production, which is expected to boost the demand for cathode materials [6][8]. - The company has established long-term supply agreements with major clients, which are anticipated to positively impact future performance [9][11]. Summary by Sections Financial Performance - In 2024, the company reported revenue of 7.593 billion yuan, a decrease of 49.80% year-on-year, with a net profit of 472 million yuan, down 75.48% [6][12]. - The operating cash flow increased by 30.74% to 1.598 billion yuan, indicating improved cash generation despite declining profits [6]. - The company plans to distribute a cash dividend of 2.0 yuan per 10 shares [6]. Market Trends - In 2024, China's new energy vehicle sales reached 12.859 million units, a year-on-year increase of 36.10%, contributing to a growing demand for cathode materials [6][8]. - The production of power batteries in China grew by 40.96% in 2024, with expectations for continued growth in 2025 [6][8]. Product and Capacity Development - The company achieved a sales volume of 10.07 million tons of lithium battery materials in 2024, a significant increase of 60.53% year-on-year [8]. - The company is expanding its production capacity, with a total capacity of 129,000 tons by the end of 2024, and plans to add 80,000 tons of high-end capacity in 2025 [8][9]. Strategic Partnerships - The company has signed long-term supply agreements with SK On and LGES, which are expected to secure significant sales volumes and enhance market position [9][11]. - A strategic cooperation framework was established with Zhongwei Co., focusing on resource development and product supply [9]. Future Outlook - The company anticipates a recovery in performance in 2025, driven by increasing demand for lithium battery materials and stabilization of raw material prices [8][9]. - The projected earnings per share for 2025 and 2026 are 1.34 yuan and 1.85 yuan, respectively, with corresponding price-to-earnings ratios of 30.45 and 22.04 [11][12].