Guizhou Zhenhua New Materials Co., Ltd. (stock code: 688707) is a high-tech enterprise specializing in the field of lithium salt. However, according to its results for the third quarter of 2023, the company faces some challenges. This article will interpret its financial report in detail.
First of all, the company's operating revenue fell 54.68% in the first three quarters of 2023 compared with the same period last year, mainly due to the decline in the price of lithium salt and the slowdown in downstream demand. However, it is worth noting that with the increase in downstream demand, the company's product sales increased by more than 60% in the third quarter compared with the second quarter, which may indicate that the company's operating revenue is expected to recover in the future.
Second, net profits belonging to shareholders of listed companies fell 78.42 per cent year-on-year, mainly due to falling lithium prices and slowing downstream demand. However, with the increase in downstream demand, the company turned a profit in the third quarter and its profitability improved.
Third, the net cash flow generated by operating activities fell 20.68% compared with the same period last year, mainly due to the decline in the price of lithium salt and the slowdown in downstream demand, resulting in a decline in operating income and sales rebate compared with the same period last year.
In addition, basic earnings per share fell 78.42% year-on-year, mainly due to a decline in net profit. The total R & D investment decreased by 70.42% compared with the same period last year, mainly due to the decline in the price of raw materials, the corresponding reduction in the cost of R & D access materials, and the company's continued promotion of R & D projects to reduce costs and increase efficiency, so R & D costs have dropped.
Total assets fell 20.97% compared with the same period last year, mainly due to the corresponding decrease in receivables and inventory due to the decline in the price of raw materials. At the end of the period, the total assets were 8.75 billion yuan, the total liabilities were 4.933 billion yuan, and the net assets were 3.816 billion yuan. The asset-liability ratio was 56.38%, down from 63.07% at the beginning of the period, indicating an improvement in the company's financial structure.
In terms of profitability, the gross profit margin for the reporting period was 6.06%, down from 15.21% in the same period last year. The net interest rate was 0.71%, down from 10.16% in the same period last year. Return on equity (ROE) is 0.95%.
Overall, Zhenhua New Materials faced some challenges in the first three quarters of 2023, but the company's business performance improved with the increase in downstream demand. Although the company may face some pressure in the short term, in the long run, as the company continues to promote R & D projects to reduce costs and increase efficiency, as well as the recovery of downstream demand, the company's performance is expected to improve.
For investors, they may need to pay more attention to the operating conditions of the company and the price changes in the lithium salt market. In the process, investors may need to be patient and wait for the company's transformation to bear fruit.
This article only represents the judgment made by the analyst himself or the analyst on the basis of AI analysis, and can not be used as any investment index, nor does it constitute any investment advice. The original intention of this paper is to help investors analyze and judge the capital market data in the most intuitive and fast way and from the most professional perspective.