Industry chain earnings declined year-on-year
Prices of some parts of the lithium battery industry chain continued to decline in 2024Q1, while the decline basically stopped and stabilized at the end of Q1 so far. As of the end of 2024Q1, the price of lithium carbonate rose 9% compared with that of the beginning of the year, leading to a slight increase in the prices of anode materials and electrolyte linking lithium carbonate as raw materia. The prices of anode materials, diaphragm, and power cores continued to decline compared with that of the beginning of the year, with the price of diaphragm decreasing at the largest rate. And as of 7 May 2024, compared with the end of the first quarter, the overall price of the industry chain is basically a stabilising trend.
The revenue of the industrial chain in 2024Q1 decreased year-on-year, and the profit decreased year-on-year, and rebounded month-on-month. The lithium battery industry chain achieved operating income of 200.722 billion yuan in 2024Q1, down 17.34% year-on-year and 22.23% month-on-month. As the price of the industrial chain fell sharply compared with the same period last year, the decline in selling price led to a year-on-year decline in revenue scale. The first quarter is the traditional off-season for terminal demand, and the enthusiasm of the industrial chain is not high, coupled with the continued low price of the industrial chain, resulting in a further reduction in revenue scale from the previous quarter. The net profit attributable to the parent company of the industrial chain in 2024Q1 was 14.314 billion yuan, a year-on-year decrease of 10.91%, and the year-on-year decline was significantly narrower than that of 2023Q4 (-51.81%), with a quarter-on-quarter increase of 19.50%. The net profit was the first time since the third quarter of last year to achieve a single-quarter quarter-on-quarter rebound, mainly related to the fact that the company's high-priced inventory was basically consumed at the end of 2023, and the inventory price loss in the first quarter of 2024 was significantly reduced.
The inventory of the industrial chain is basically stable compared with the end of 2023.
At the end of 2024Q1, the inventory level was basically stable, maintaining a high inventory turnover rate. Since 2023, the lithium battery industry chain has been in the stage of destocking. As of the end of 2023, the total inventory balance of the industrial chain was 175.942 billion yuan, a decrease of 27% from the end of 2022. The proportion of total assets was 9.28%, a decrease of 5.1pct from the end of 2022. The inventory balance in 2023 will decrease, on the one hand, due to the destocking of inventory, and on the other hand, the decline in inventory prices. As of the end of Q1 2024, the total inventory balance of the industrial chain was 176.867 billion yuan, basically unchanged at the end of 2023, and the proportion of total assets was 9.21%, basically the same as that at the end of 2023, indicating that the inventory in 2024Q1 was basically stable. The inventory turnover rate of the industrial chain in 2024Q1 was 0.92 times, the highest turnover rate in the same period in the past five years.
In 2023Q4, the scale of projects under construction in the industrial chain decreased month-on-month for the first time in nearly three years, which indicates that the pace of capacity expansion began to slow down. As of the end of 2023Q4, the total scale of projects under construction in the lithium battery industry chain was about 143.766 billion yuan, a decrease of 12.66% from the end of 2023Q3, which was the first month-on-month decline in the scale of projects under construction in the past three years. The scale of projects under construction in 2024Q1 increased by 8.83% month-on-month, but the scale is still lower than the level at the end of the first half of 2023. Forced by overcapacity and the slowdown in downstream demand, some capacity plans in the industrial chain have been delayed or cancelled, and the pace of capacity expansion has slowed down.