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Financial reporter Xu Yaowen
On April 28, two listed companies, Xingyuan Materials and Taihe New Materials, jointly launched the high-safety and lightweight aramid series separator product "Xinghe aramid separator" for lithium batteries.
When a product with better performance comes, so does the good.
On the second day of the release of the new product, Xingyuan Material's stock price went all the way up, and finally closed up 6.87%. Strangely, the stock price of Taihe New Materials has fallen. On the same day, Taihe New Materials opened low and finally closed down 1.43%.
Why does the same good work not work when it comes to Taihe New Materials? It may stem from the market's concern about the company's past performance.
Net profit attributable to the parent company in the first quarter of 2024 decreased by 81.4% year-on-year
A few days ago, Taihe New Materials disclosed the 2023 annual report and the first quarter report of 2024. The financial report shows that the company's profitability continues to decline.
Flush iFinD data shows that in 2023, Taihe New Materials will increase revenue but not profits. The operating income was 3.925 billion yuan, a year-on-year increase of 4.67%, and the net profit attributable to the parent company was 333 million yuan, a year-on-year decrease of 23.59%.
Affected by the company's non-public offering and the initial public offering of its subsidiary, Minshida, the company's net cash flow from fundraising activities and monetary funds increased. However, the operating side did not add to the financial situation, and the net cash flow from operating activities in 2023 decreased by 24.55% year-on-year to 356 million yuan.
In 2023, the company's sales expenses will exceed 100 million yuan, an increase of 53.30% from the same period of the previous year to 113 million yuan. In addition, management expenses increased by 31.33% to 275 million yuan, exposing the company's performance lag in management.
In the first quarter of 2024, the company's operating conditions did not improve, and its profits both declined. The operating income was 966 million yuan, down 4.55% year-on-year, and the net profit attributable to the parent company shrank by 80%, down 81.4% year-on-year to 25.179 million yuan.
It is worth noting that the net profit attributable to the parent company has hit a new low in the company's profitability in the first quarter since 2017.
In addition, net cash flow from operating activities for the period also hit a new low. In the first quarter of 2024, the company's cash position was under pressure, with net cash flow from operating activities of -237 million yuan - since the first quarter of 2011, after 13 years, the company's net cash flow from operating activities in the first quarter was negative again.
In the first quarter of 2024, the company's non-recurring profit and loss reached a new high, reaching 18.3244 million yuan, accounting for 72.78% of the net profit attributable to the parent company. That is to say, less than 3% of the current profit is obtained through business activities, and the real profitability is doubtful.
The gross profit margin of the spandex business fell to -3.00%, which lowered the company's profitability
As for the reasons for the decline in performance, Taihe New Materials said that it was greatly affected by the spandex business.
Spandex and aramid are the company's two main businesses, and before 2022, the spandex business accounted for 60% of the revenue. After that, the situation reversed, and the scale of the spandex business continued to shrink, shrinking by nearly half in two years, accounting for less than 40% of the revenue.
The reason for this situation is related to the weak demand in the spandex industry and the sharp drop in product prices. In 2022, the gross profit margin of the company's spandex business was only 0.16%, and it will drop to -3.00% in 2023, which has seriously affected the company's overall profitability.
Although the spandex business is weak, Taihe New Materials still has aramid. Aramid materials have excellent mechanical properties and thermal stability, and the demand for aramid materials in aerospace, automobile manufacturing, 5G communication and other fields has been increasing in recent years, showing great market prospects.
Why is the performance of Taihe New Materials, which holds the opportunity of aramid, still weak? There may be two main reasons.
First of all, there is the issue of material prices. Since 2023, the price of aramid raw materials has fluctuated and shown a downward trend. Therefore, even if the company's meta-aramid production capacity enters the "10,000-ton club" for the first time, the revenue of aramid business will not contribute much to profits, and it is difficult to remedy the impact of spandex on the company's overall operating performance.
Secondly, Taihe New Materials is a supplier of aramid materials, and the added value of its products is relatively low.
Of course, Taihe New Materials also has subsidiaries like Minshida that produce high value-added aramid paper. However, due to factors such as the scale of Minshida, it is still difficult to increase the profits of Taihe New Materials through the holding company.
Does the aramid diaphragm have a prospect or a "money scene"?
Lithium battery separator is an important determinant of the safety degree of lithium battery. According to the data, with the development of the application market, the terminal market has continuously improved the requirements for the performance, quality, stability, consistency, economy and safety of lithium battery separator products.
According to the relevant introduction of Taihe New Materials, the "Xinghe Aramid Separator" jointly launched by Xingyuan Materials and Taihe New Materials has better thermal performance, liquid absorption, liquid retention performance, and lighter specific gravity, which can improve the electrical performance, safety and manufacturing efficiency of the battery.
So can the aramid separator launched this time reverse the decline in the company's performance? The answer does not seem to be clear.
Xingyuan Materials said in the performance briefing held a few days ago that the price of lithium battery separators will drop significantly in 2023. It can also be known from the performance of Taihe New Materials that the price fluctuations of aramid materials will have an impact on the company's operating performance. Previously, Taihe New Materials related workers also said in an interview with reporters that in addition to the spandex business, the decline in the price of aramid materials had a negative impact on the company's performance in the first quarter.
Not only that, Taihe New Materials is also facing the challenge of intensified market competition.
With the growth of new energy vehicle sales in mainland China, problems such as spontaneous combustion and safety accidents have received more and more widespread attention. From the perspective of the causes of battery fire, the destruction of the separator is one of the important reasons for the battery fire. As a result, more and more attention is being paid to aramid separators with a higher safety factor – such as market funds. It is reported that in addition to Taihe New Materials, listed companies such as Putailai are also exploring the industrialization of aramid coated separators.
It seems that the effectiveness of the "membrane method" of Taihe new material aramid separator has yet to be tested by the market and time.