Jiangxi Special Electric Motor: Futures Hedging Mitigates Impact of Lithium Price Decline, YoY Loss Reduction Last Year

In 2024, lithium carbonate prices continued their downward trend. Jiangxi Special Electric Motor (002176.SZ) reported losses for the second consecutive year, but on a YoY basis, the losses narrowed. The company stated that its lithium carbonate futures hedging business mitigated the adverse impact of the continuous decline in lithium carbonate prices.

Jiangxi Special Electric Motor announced today that its net profit attributable to shareholders of the publicly listed firm is expected to record a loss of 236 million to 285 million yuan in 2024, compared to a loss of 397 million yuan in the same period last year. The company's net losses for Q1, Q2, and Q3 were 30.2891 million yuan, 33.7764 million yuan, and 18.165 million yuan, respectively. Based on this calculation, the company's Q4 single-quarter net loss is estimated to be between 154 million and 203 million yuan.

On the same day, Jiangxi Special Electric Motor released its 2024 asset impairment provision announcement, stating that the provision for various asset impairments is expected to reduce the net profit attributable to the parent company's shareholders by approximately 146 million yuan in 2024, accounting for 36.67% of the company's most recently audited net profit attributable to shareholders of the publicly listed firm. Excluding the asset impairment provision, the company's Q4 estimated loss range is between 7.7675 million and 56.7695 million yuan.

This marks the second consecutive year of losses for Jiangxi Special Electric Motor. However, compared to the 397 million yuan loss in 2023, the company's 2024 performance is expected to show a YoY reduction in losses. In the announcement, the company stated that during the reporting period, it conducted timely lithium carbonate futures hedging business, which reduced the adverse impact of the continuous decline in lithium carbonate prices.

In 2024, lithium carbonate prices showed a trend of rising first and then falling, continuing the overall downward trend from 2023.

Due to the continuous decline in lithium carbonate prices, Jiangxi Special Electric Motor's revenue composition underwent changes. According to the 2024 semi-annual report, the company's revenue composition was as follows: electric motors accounted for 67.15%, lithium mine extraction and lithium chemicals manufacturing accounted for 29.71%, and other businesses accounted for 3.15%. Among these, the revenue share of lithium mine extraction and lithium chemicals manufacturing dropped from over 65% in the same period of the previous year to 29.71%.