Ningbo Shanshan (600884) Q2 2024 earnings summary

Executive summary

• Operating income for H1 2024 was RMB 8.82 billion, down 6.84% year-over-year; net profit attributable to shareholders was RMB 17.57 million, down 98.27% year-over-year; net profit after non-recurring items was RMB 23.91 million, down 95.93% year-over-year.

• Both anode materials and polarizer businesses experienced significant price declines and profitability pressure due to industry downturns and overcapacity.

• Asset optimization and divestment of non-core businesses, along with the absence of one-time investment income recognized in the prior year, contributed to the profit decline.

Financial highlights

• Basic and diluted EPS for H1 2024 were RMB 0.008, down 98.52% year-over-year.

• Net cash flow from operating activities was RMB 691 million, a significant improvement from negative RMB 1.46 billion in the prior year.

• Total assets at June 30, 2024, were RMB 50.31 billion, up 3.79% from year-end 2023.

• R&D expenses increased 41.64% year-over-year to RMB 526 million, reflecting continued investment in technology.

Outlook and guidance

• The anode materials industry is expected to see price stabilization and potential price increases in H2 2024, with continued demand growth from NEVs and energy storage.

• Polarizer business is positioned to benefit from favorable consumer trade-in policies and ongoing demand for large-size display panels.

• The company will continue to focus on cost reduction, efficiency improvement, and technological innovation to enhance competitiveness.