KEDA Industrial Group: H1 Revenue Exceeds RMB 4.7 Billion

On the evening of August 14, KEDA Industrial Group Co., Ltd. (“KEDA”) disclosed the 2023 Interim Report. While KEDA has been expanding its three major business lines in a systematic manner under the guidance of the “three ten-billion strategies”, it posted revenue of RMB 4.747 billion for the first half of 2023. KEDA’s net profit attributable to shareholders of the listed company and net profit attributable to shareholders of the listed company excl. non-recurring profit or loss were RMB 1.268 billion and RMB 1.210 billion, respectively.
 
In general, KEDA witnessed a continued expansion of production capacity and a stable revenue growth regarding the overseas building materials sector. Moreover, its building ceramic machinery sector saw significant domestic pressure due to the impact of the domestic ceramic industry in the upstream and a relatively stable overseas development. Additionally, in terms of the lithium-ion battery materials business and machinery sector, its efforts were concentrated on capacity expansion and efficiency improvement for anode materials, as well as market expansion for lithium-ion battery machinery, as such capacity expansion, and the implementation of the relevant measures for cost reduction, in the future are expected to generate a certain marginal contribution, despite of the current restraint from the weak price trend of lithium-ion battery materials.
 
In terms of ROI, which constantly draws more attention from investors, although the contribution of Qinghai Yanhu Lanke Lithium Industry Co., Ltd. (“Lanke Lithium”) to the profit of KEDA has suffered a drop due to the large price fluctuations in the market, the lithium-ion battery materials business and machinery of KEDA and the relevant ROI still show considerable potential, as the technology improvement project for Lanke Lithium Industry that has been continuously promoted by KEDA and other shareholders has resulted in an increase in the product output, and the gradually stabilizing price trend in the market is expected to reduce the anticipated periodic fluctuations.
 
Taking a close look at the revenue-generating sectors, the gross profit margin of the building materials machinery sectors that are featured by ceramic machinery increased by 1.99 percentage points after a series of efforts such as technological innovation and the improvement of the market share in overseas markets. On the one hand, KEDA has been accelerating its move towards a green, high-end and intelligent building ceramic machinery business model. Meanwhile, KEDA is aiming to improve the multiple application development of ceramic machinery by increasing its production capacity and expanding its market.  On the other hand, KEDA has been taking active actions to implement its “global” development strategy, as the proportion of overseas orders during the Reporting Period exceeded 60%.
 
It is worth noting that KEDA has recently made a significant progress towards its strategic goal of developing itself from an equipment supplier to a comprehensive service provider. On July 2023, KEDA acquired 40% interest in Shandong SinoCera Create-Tide New Materials High-Tech Co., Ltd. (“SinoCera Create-Tide”), a domestic leader in the sector of color glazes for ceramics in China. This effort conduces to KEDA’s expansion of the categories of consumables , and creates synergies with KEDA’s building ceramic machinery sector to facilitate the achievement of the “ten-billion ceramic machinery” strategy.
 
Under the guidance of the “ten-billion building materials” strategy, KEDA has been promoting the development of its overseas building materials sector by jointly implementing product diversification, capacity expansion and market expansion. By the end of the Reporting Period, KEDA operates 6 production bases in 5 African countries, and owns 16 production lines for building ceramics and one production line for ceramic sanitary ware. During the Reporting Period, the production yield of building ceramics exceeded 70 million square meters, and that of ceramic sanitary ware exceeded 100,000 pieces. Meanwhile, KEDA has set up research & survey teams in South America and Asia, and has completed the research and survey of the architectural glass project in Peru.
 
In terms of the lithium-ion battery materials business and machinery sector, KEDA continued to conduct capacity expansion and efficiency improvement for anode materials, and attained multiple orders for lithium-ion battery material equipment. Specifically, with respect to anode materials, the Fujian base phase-I production line for artificial graphite anode materials has been put into operation, and is currently undergoing capacity expansion and technology improvement. Active efforts are made to facilitate the completion of the Fujian base phase-II 50,000-ton project and the Chongqing base 50,000-ton artificial graphite anode material project within the year. With respect to lithium-ion battery material machinery, KEDA has entered into the contracts for multiple projects, including the technology improvement and phase-II project in Fujian base, the anode material project in Chongqing base, and the granulation/agglomeration kiln projects in cooperation with Hunan Zhongke Shinzoom Co., Ltd. and multiple other enterprises.