Lb Group Co.Ltd(002601) (002601)
Event: the company issued the announcement on investing in the construction of 200000 t / a lithium ion battery cathode material integration project. Henan Baili new energy materials Co., Ltd., a wholly-owned subsidiary of the company, plans to invest in the construction of 200000 t / a lithium ion battery cathode material integration project. With an investment of 3.5 billion yuan, the project is divided into three phases: phase I and phase II respectively build a production line of graphite cathode materials for lithium-ion batteries with an annual output of 50000 tons, and phase III build a production line of graphite cathode materials for lithium-ion batteries with an annual output of 100000 tons.
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In depth layout of the new energy materials industry to form industrial synergy. The new energy battery material projects under construction and layout by the company include: 100000 tons of iron phosphate project in Xiangyang base, 200000 tons of lithium iron phosphate project in Qinyang base, 100000 tons of battery cathode and 200000 tons of iron phosphate project in Jiaozuo base. Taking advantage of its own iron source, the company has increased its investment in the new energy materials industry. After all projects are completed and put into operation, a total capacity of 800000 tons of new energy materials will be formed, including iron phosphate, lithium iron phosphate and graphite negative electrode. The investment and construction of the negative electrode material project will help to strengthen the company’s strategic layout of lithium-ion battery negative electrode material products, help the company form a more complete industrial system, and actively promote the company’s integration into the production and manufacturing supply chain of new energy materials.
Graphite negative electrode has excellent performance and broad demand prospect. As a key cross industry among the three major industries of new energy, new materials and new energy vehicles, the demand side of lithium-ion batteries is gradually expanding. As one of the four key main materials of lithium-ion battery, negative electrode material is an indispensable part of the lithium-ion battery industry chain. Due to its low cost and excellent comprehensive performance, graphite negative electrode material determines its proportion in the field of lithium-ion battery to increase year by year.
The titanium dioxide boom in the past 22 years is expected to continue, and the leading performance of titanium dioxide can be expected: the company’s annual titanium dioxide production capacity is 1.01 million tons. It is a leading titanium dioxide enterprise in China, and its production capacity ranks first in Asia and third in the world. Since its listing in 2011, the company has continuously strengthened the integration of industrial chain resources, forming a whole industrial chain pattern from titanium ore mining and beneficiation to the processing of raw materials such as high titanium slag and rutile, and then to titanium dioxide by sulfuric acid method, titanium dioxide by chlorination method, sponge titanium and other products. In the second half of 2020, the epidemic situation dissipated, the economy recovered, the downstream demand for titanium dioxide in China continued to recover, the price increase of titanium dioxide in the off-season exceeded the market expectation, and the supply and demand of titanium dioxide remained in a tight balance in 2021. Looking forward to 2022, carbon neutralization will continue to promote the contraction of supply, the downstream demand will recover steadily, the titanium dioxide industry is expected to maintain a high boom, the growth momentum of the company’s main business titanium dioxide is sufficient, and the performance can be expected.
Profit forecast, valuation and rating: we maintain the profit forecast of the company. It is estimated that the net profit of the company from 2021 to 2023 will be RMB 4.918 billion, RMB 5.429 billion and RMB 6.029 billion respectively, and the corresponding EPS will be RMB 207, RMB 2.28 and RMB 2.53 respectively. As a leading enterprise of titanium dioxide in China, the company has strong scale advantages and cost advantages. After the superimposed lithium battery material project is put into operation, its cost advantages and profitability will be further enhanced, so it maintains the “buy” rating.
Risk tip: the construction of new projects is less than expected, and the demand growth of graphite cathode is less than expected.
