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27 Oct 2023China Securities Journal (www.cs.com.cn) News On the evening of October 24, KEDA Industrial Group (600499) released its third-quarter report for 2023. In the first three quarters of 2023, KEDA Industrial Group achieved revenue of RMB 7.028 billion, net profit attributable to the parent company of RMB 2.019 billion, and net profit after deducting non-recurring gain or loss items of RMB 1.954 billion. In the third quarter alone, KEDA Industrial Group achieved revenue of RMB 2.281 billion, net profit attributable to the parent company of RMB 751 million, and net profit after deducting non-recurring gain or loss items of 744 million RMB.
From an operational layout perspective, in the third quarter, KEDA Industrial Group continued to implement its globalization strategy, with global revenue accounting for over 60%. Notably, the building materials business still maintained strong performance, with overall profitability. The building material machinery business in China faced pressure, but benefited from an increased share of global orders and the implementation of lean production management, maintaining a good gross profit margin.
During the reporting period, KEDA Industrial Group announced two consecutive acquisitions to deepen its global presence in components and consumables business layouts. In July of this year, the company acquired a 40% stake in SinoCera Create-Tide, a leading manufacturer of pigment & glaze in China, and in collaboration with them, established a subsidiary called Guangdong Create-Tide New Materials Co., Ltd. This move was aimed at expanding their presence in the global consumables market. In September, KEDA Industrial Group announced the acquisition of a 70% stake in the Italian mold company FDS, further strengthening its business team's presence in the European market and enhancing resource integration at its European base.
Apart from the ceramic machinery business, KEDA Industrial Group has also expanded its footprint in Africa with its building materials business. In October, the fifth phase of the building ceramic production project in Ghana, known as the K6 line, was completed and put into operation. As of now, KEDA Industrial Group has jointly established and operates 6 production bases in 5 African countries, with 17 building ceramic production lines and 1 sanitary ware production line. Several projects related to tiles, sanitary ware, glass, and more are under construction and expected to commence production in recent years.
In the third quarter, KEDA Industrial Group made steady progress in its lithium-ion battery sector planning and layout. During the reporting period, there was a significant increase in the production and sales volume of negative electrode materials. Revenue gradually increased, and the quarterly profitability improved month by month. Furthermore, KEDA Industrial Group continued to increase its focus on technological and product innovations in lithium-ion battery materials. KEDA Industrial Group successfully achieved a breakthrough with a new type of artificial graphite product, which is industry-first with a life cycle of over 12,000 weeks. It is expected to be available in mass production around year-end.
Despite pressures on lithium carbonate in the third quarter, thanks to the continuous release of production capacity, Lanke Lithium achieved a record-high daily production of lithium carbonate. In the first three quarters of 2023, Lanke Lithium produced approximately 25,800 tons of lithium carbonate and sold around 28,400 tons. The end-of-period inventory was about 1,600 tons. During this period, Lanke Lithium achieved an operating income of RMB 5.511 billion and a net profit of RMB 3.230 billion. This had a significant impact on the net profit attributable to the parent company, contributing RMB 1.4 billion, and continued to be substantial considerable profits to KEDA Industrial Group.
It's worth noting that on September 11, KEDA Industrial Group's board of directors approved a share repurchase plan of up to 30 million shares. As of October 10, KEDA Industrial Group has repurchased a total of 26.9745 million A-shares, accounting for 1.38% of the company's current total share capital, with a repurchase amount of RMB 305 million.
(Reprinted from China Securities Journal · www.cs.com.cn)
