\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 29 Pangang Group Vanadium Titanium & Resources Co.Ltd(000629) )
Event overview: on April 7, the company issued a pre increase announcement of 2022q1 performance: it is expected that the net profit attributable to the parent company in 22q1 will reach 450 million yuan to 500 million yuan, with a year-on-year increase of + 111.26% to + 134.73% and a month-on-month increase of + 109.29% to + 132.55%. 22q1 realized a net profit of 405 million yuan to 455 million yuan after non deduction, with a year-on-year increase of + 180.52% to + 215.15% and a month on month increase of + 81.00% to + 103.35%.
Analysis and judgment:
The vanadium industry maintains a high outlook, and the volume and price of vanadium products of the company rise simultaneously. In terms of price, the 22q1 vanadium industry maintained a high outlook, and the price of vanadium products continued to rise. The average market price of 22q1 ferrovanadium was + 30.6% year-on-year, 15.6% month on month, and the average market price of vanadium pentoxide was + 29.8% year-on-year, 14.4% month on month. In terms of titanium dioxide, the price of 22q1 titanium dioxide remained high. The average market price of 22q1 titanium dioxide was + 17.0% year-on-year and decreased slightly by 0.1% month on month. In terms of sales volume, after the acquisition of Xichang vanadium products, the company grasped the market opportunity of vanadium products, made efforts to coordinate resources and respond to customer needs, and the sales volume of vanadium products increased significantly year-on-year. In addition, the company strictly implemented cost reduction and efficiency improvement measures, actively digested the adverse effects of the rise in auxiliary materials and power costs, and helped 22q1 achieve rapid growth.
Successfully acquired Xichang vanadium products + signed a strategic agreement with Sichuan Desheng group, and the company’s leading position in vanadium products will be more stable. In 2021, the company successfully completed the acquisition of Xichang vanadium products (18000 tons of vanadium products capacity), and the existing vanadium products capacity reached 40000 tons (calculated by V2O5), which is the largest in the world. In addition, the company has signed a cooperation framework agreement with Sichuan Desheng. The two sides plan to set up a joint venture ( Pangang Group Vanadium Titanium & Resources Co.Ltd(000629) contribution ratio of 65% ~ 70%) to invest in the construction of a vanadium slag processing production line with a capacity of 20000 tons of five V2O5. The company’s equity vanadium product capacity is expected to reach 54000 tons in the future, and the leading position will be more stable at that time.
Vanadium battery has broad development prospects and is expected to become an important performance growth point of the company in the future. In 2021, the company signed a cooperation agreement with Dalian Borong and its related subsidiaries and joint-stock companies to process the company’s ammonium polyvanadate raw materials into vanadium energy storage medium, which will be fully used in the “national demonstration project (phase I) of Dalian flow battery energy storage and peak shaving power station” project of constant current company (Dalian Borong joint-stock company). The company’s vanadium battery has broad development prospects and is expected to become an important performance growth point in the future.
Lay the foundation for the company’s long-term stock incentive plan. In January 2022, the company granted 13.28 million restricted shares to 95 incentive objects, including the company’s directors, managers and core backbone personnel, accounting for 0.15% of the company’s total share capital of 8589746200 shares at the time of the announcement of the incentive plan, and the grant price was 2.08 yuan / share. The stock incentive plan will fully mobilize the initiative and creativity of the company’s directors, managers and core employees, effectively enhance the company’s cohesion, enhance the company’s competitiveness and lay the foundation for the company’s long-term development.
Investment suggestion: the company’s vanadium production capacity is at the forefront of the world. With the improvement of the prosperity of the vanadium industry and the gradual expansion of the vanadium battery application market, the company’s performance can be released. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 1.754/2.247/2.724 billion, corresponding to the closing price of RMB 3.77 on April 7, 2022, and PE to be 18 / 14 / 12 times from 2022 to 2024, maintaining the “recommended” rating of the company.
Risk warning: downstream demand is less than expected; The development of vanadium battery is less than expected; The project is not progressing as expected.
