Affected by the sharp decline in nickel-lithium prices, Huayou Cobalt's performance was under pressure in the first half of the year, but both revenue and net profit stopped falling in the second quarter. Huayou Cobalt stated that its performance in the second quarter grew significantly compared to the first quarter, mainly due to the gradual production and standardization of upstream nickel resource development projects.
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On August 19th, Cailian Press reporter Wang Bin reported that Huayou Cobalt (603799.SH) was affected by the sharp decline in nickel and lithium prices, and its performance continued to be under pressure in the first half of this year. However, revenue and net profit both stopped falling in the second quarter.
Huayou Cobalt released its 2024 semi-annual report tonight, with revenue of 30.05 billion yuan in the first half of the year, a year-on-year decrease of 9.88%; achieving a net profit attributable to the parent of 1.671 billion yuan, a year-on-year decrease of 19.87%; the net cash flow from the company's operating activities was about 2.764 billion yuan, a year-on-year increase of 54%.
According to financial data, Huayou Cobalt's revenue and net profit for Q1 of this year were 14.963 billion yuan and 0.522 billion yuan, respectively, a year-on-year decrease of 21.7% and 48.99%, respectively. Based on this calculation, the company achieved revenue of 15.09 billion yuan in Q2, a year-on-year increase of 5.99%; Achieving a net profit of 1.148 billion yuan, a year-on-year increase of 8.23%, and a growth rate of about 119.81% compared to Q1.
Huayou Cobalt stated that its Q2 2024 performance grew significantly compared to Q1, mainly due to the gradual production and standardization of upstream nickel resource development projects, and the effectiveness of the company's integrated operation strategy gradually appeared.
Huayou Cobalt is mainly engaged in the research and development and manufacturing of new energy lithium battery materials and new cobalt and nickel materials products. In its view, the shipment volume of the company's main products in the first half of the year has stabilized and rebounded, and the advantages of integrated industry operations have been further highlighted.
Specifically, from January to June this year, the company's shipment volume of lithium battery positive electrode precursors was 0.067 million tons (including ternary precursors and tricobalt tetroxide, including internal supply), a year-on-year increase of approximately 11%; sodium-ion precursor shipments achieved a leap of hundreds of tons; the shipment volume of cathode materials was 0.053 million tons (including internal supply and equity of joint stock companies), a slight decrease year-on-year, but an increase of more than 20% compared to the second quarter; the shipment volume of cobalt products was about 0.023 million tons (including internal supply), a year-on-year increase of approximately 13%; the shipment volume of nickel products was about 0.076 million tons (including internal supply), a year-on-year increase of more than 40%.
In terms of demand, Huayou Cobalt stated that affected by the cost reduction factor of batteries, lithium iron phosphate batteries seized some of the market share by virtue of their low cost advantages, and the proportion of ternary batteries installed has declined. However, high-nickel, high-voltage ternary materials have significant advantages in energy density, lightweight and low-temperature performance. With the significant decline in core metal raw material prices such as nickel, cobalt, and lithium, the market share of ternary materials is expected to rebound. At the same time, under the trend of the industrial technology path of new energy vehicles, energy storage systems, and eVTOL low-altitude aircrafts towards high-energy density, high-nickel ternary batteries are expected to be accelerated in promotion and popularization, and the demand for nickel sulphate and upstream nickel raw materials is expected to recover.
In terms of costs, Huayou Cobalt's operating costs in the first half of the year decreased by 11.63% year-on-year to 2.507 billion yuan, among which there were significant changes in management fees and financial expenses: the former was 0.95 billion yuan, a year-on-year decrease of 14.88%, The reason is that employee compensation and stock payment expenses have decreased; the latter was 1.07 billion yuan, a year-on-year increase of 98.64%, which the company attributed to a decrease in exchange gains.
The mid-year report data of Huayou Cobalt shows that as of June 30, 2024, the company's monetary funds are 19.003 billion yuan, accounts receivable are 6.77 billion yuan, and inventory is 14.213 billion yuan; the total liabilities of the company during the same period were 84.929 billion yuan, with an asset-liability ratio of 64.71%.
On the secondary market, as of the close of August 19th, Huayou Cobalt's stock price was 22.25 yuan, and the company's latest market value was approximately 37.8 billion yuan, less than one-third of the peak market value.