In the first quarter of 2024, China lithium battery industry showed signs of a downturn, with many companies experiencing a “Waterloo” in their performance in the stock market.
For instance, EVE battery (300014.SZ) reported revenue of 9.317 billion yuan, down 16.70% year-on-year, with a net profit of 1.066 billion yuan, down 6.49% year-on-year. Similarly, Tianqi Lithium (002466.SZ) saw both revenue and net profit decline, with first-quarter revenue of 2.585 billion yuan, down 77.42% year-on-year, and a net loss of 3.897 billion yuan, a year-on-year decrease of 179.93%.
Regarding the first-quarter performance of the lithium battery industry, Mo Ke, founder and chief analyst of Real Lithium Research, told a reporter from the “China Business Journal”: “Battery prices were already quite low in the first quarter of 2024. This was mainly due to the low running prices of lithium carbonate. Many battery materials are priced with reference to lithium carbonate prices.”
Further Revenue Decline
Recently, lithium battery listed companies have successively released their first-quarter 2024 performance reports, most showing a downward trend.
A research report on the lithium battery industry published by Everbright Securities mentioned that the lithium battery sector’s revenue further bottomed out in the first quarter of 2024, with revenue of 237.3 billion yuan, down 21% year-on-year and quarter-on-quarter; net profit attributable to the parent company was 13.6 billion yuan, down 55% year-on-year, but up 9% quarter-on-quarter. The industry’s profits shrank significantly, with high barriers, advantageous patterns, and high prosperity segments achieving cyclical crossovers. Most segments of the lithium battery sector saw a significant decline in net profit attributable to the parent company in the first quarter of 2024, mainly due to intensified competition and asset impairment caused by substantial price reductions.
Specifically, although CATL (300750.SZ), a leading company, saw a decline in revenue, its net profit continued to grow. In the first quarter, it achieved revenue of 79.771 billion yuan, down 10.41% year-on-year; net profit attributable to the parent company was 10.51 billion yuan, up 7.00% year-on-year, and net profit after deducting non-recurring gains and losses was 9.2474 billion yuan, up 18.56% year-on-year.
EVE Energy, on the other hand, achieved revenue of 9.317 billion yuan in the first quarter of 2024, down 16.70% year-on-year, and net profit of 1.066 billion yuan, down 6.49% year-on-year.
In contrast, Sunwoda (300207.SZ) saw growth in both revenue and net profit. In the first quarter, Sunwoda achieved revenue of 10.975 billion yuan, up 4.74% year-on-year; net profit attributable to shareholders of the listed company was 319 million yuan, up 293.45% year-on-year; net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 279 million yuan, up 212.89% year-on-year.
Regarding the year-on-year growth in revenue, Sunwoda stated that this was due to a significant inventory impairment in the first quarter of 2023, coupled with growth in its power battery segment in the first quarter of this year, which together boosted the company’s performance.
Regarding the performance fluctuations of lithium battery manufacturers, Mo Ke told reporters: “Battery prices were already quite low in the first quarter of 2024. This was mainly due to the low running prices of lithium carbonate. Many battery materials are priced with reference to lithium carbonate prices.”
Reporters noted that, for comparison, since late November 2022, the average price of battery-grade lithium carbonate has plummeted from a high of 595,000 yuan/ton to the 180,000 yuan/ton range in the first quarter of 2023, a drop of nearly 70%. The price of lithium carbonate remained low in the first quarter of 2024. On May 9, data released by Shanghai Steel Union showed that the average price of battery-grade lithium carbonate was 111,500 yuan/ton.
With lithium carbonate prices continuing to run low, upstream lithium mining companies also suffered. Ganfeng Lithium (002460.SZ) achieved revenue of 5.058 billion yuan in the first quarter, down 46.41% year-on-year, and a net loss of 439 million yuan, down 118.31% year-on-year.
Another lithium battery giant, Tianqi Lithium, achieved revenue of 2.584 billion yuan in the first quarter, down 77.42% year-on-year, with a net loss of 3.897 billion yuan, down 179.93% year-on-year.
Discussing the reasons for the revenue decline, Tianqi Lithium mentioned in its financial report that this was mainly due to the significant decline in the sales prices of lithium compounds, derivatives, and lithium ore in the first quarter of 2024 compared to the same period last year.