\u3000\u3 China Vanke Co.Ltd(000002) 601 Lb Group Co.Ltd(002601) )
Event: the company released its 2021 annual report. During the reporting period, the company achieved an operating revenue of 20.566 billion yuan, a year-on-year increase of 45.77%; The net profit attributable to shareholders of listed companies was 4.676 billion yuan, a year-on-year increase of 104.33%. In the fourth quarter, the net profit attributable to the parent company was 846 million yuan, a year-on-year increase of 149.48% and a month on month decrease of 39.40%.
Comments:
Titanium dioxide production and marketing reached a new high, and titanium dioxide is in a business cycle. By quarter, the company realized gross profit of RMB 1.679 billion, RMB 2.377 billion, RMB 2.450 billion and RMB 2.117 billion respectively from the first quarter to the fourth quarter. We analyzed that the decline in net profit in the fourth quarter was mainly due to the rise in the price of titanium dioxide raw material sulfuric acid, the narrowing of the price difference and the decline in the price of iron concentrate, which led to the decline in gross profit. At the same time, the company made centralized provision for management and sales expenses in the fourth quarter. In terms of titanium dioxide, according to Baichuan Yingfu, the average price of titanium dioxide in 2021 is 19444 yuan / ton (+ 29.34%). At the raw material end, the average price of titanium concentrate in 2021 is 2112 yuan / ton (+ 47.42%); The average price of sulfuric acid in 2021 is 551 yuan / ton (+ 269.39%). In 2021, the average price difference of titanium dioxide titanium concentrate sulfuric acid is 12171 yuan / ton (+ 10.67%). In 2021, the company produced 902200 tons of titanium dioxide (+ 10.41%); A total of 877800 tons of titanium dioxide were sold (+ 5.46%). The production capacity of titanium dioxide produced by chlorination method of the company is effectively released. According to the announcement, the gross profit margin of titanium dioxide of the company in 2021 was 45.02%, an increase of 9.03pct over the same period of last year, highlighting the advantages of the whole industrial chain of vertical integration of the company. According to the annual report, the company expects the global consumption of titanium dioxide to maintain a stable growth, from 7.6 million tons in 2021 to 8.9 million tons in 2025, with a CAGR of 4.6% from 2020 to 2025. The effect of China’s “steady growth” policy is gradually emerging, the supporting role of infrastructure investment in steady economic growth is more significant, and titanium dioxide, a chemical product in the real estate chain, is expected to continue to benefit. According to the annual report, China exported 1311600 tons of titanium dioxide in 2021, a year-on-year increase of 8.03%. The renovation and reconstruction of existing houses in overseas real estate markets such as the United States and the continuous acceleration of economic development in developing countries such as India and Brazil are expected to drive the continuous growth of titanium dioxide exports.
Lay out the new energy industry and cultivate the second growth curve. The company has entered the field of new energy batteries through new projects, cooperation and acquisition. The company’s waste by-product ferrous sulfate, with surplus capacity, caustic soda, sulfuric acid, steam, hydrogen, etc. can be directly or indirectly used in the production of positive and negative materials of lithium batteries, reduce production costs and create an industrial innovation of “titanium lithium coupling”. During the reporting period, the company acquired 100% equity of Henan China carbon new materials technology Co., Ltd. and made use of the advantages of China carbon new materials in talent and technology to enter the graphite cathode industry and officially enter the field of new energy; It plans to plan the 200000 ton / year battery material grade iron phosphate project, the 200000 ton / year lithium-ion battery material industrialization project, the 100000 ton / year artificial graphite cathode material project for lithium-ion battery, the 200000 ton / year lithium-ion battery cathode material integration project, and the 150000 ton / year electronic grade lithium iron phosphate project. According to the announcement, the company’s annual output of 200000 tons of battery material grade iron phosphate project (50000 tons of iron phosphate in the first phase), the annual output of 200000 tons of lithium-ion battery material industrialization project (50000 tons of lithium iron phosphate in the first phase), and the annual output of 100000 tons of artificial graphite negative electrode material for lithium-ion battery project (50000 tons of graphite negative electrode in the first phase) have entered the trial production stage or have the conditions for production. The company has signed strategic cooperation framework agreements with Shenzhen BIC battery, Tianjin Jiewei power and Liyang Tianmu pilot respectively, and the company’s core competitiveness is expected to be further improved.
The “double hundred” task in 2022, and the “fourteenth five year plan” target of 50billion revenue. In 2022, the company formulated the “double hundred goals”, that is, the production and sales of titanium dioxide reached 1 million tons. As of the end of the reporting period, the capacity under construction of titanium dioxide includes the construction project of Longbai Lufeng titanium dioxide production line with an annual output of 200000 tons, and it is planned to add 200000 tons of capacity; The annual output of 100000 tons of chlorinated titanium dioxide expansion project of new materials company plans to add 100000 tons of production capacity. In terms of sponge titanium, Yunnan titanium plans to add 30000 tons of rotor grade sponge titanium capacity; The innovation project of upgrading and transforming the titanium sponge production line with an annual output of 10000 tons plans to increase the production capacity of 10000 tons; Gansu Guoti 30000 T / a rotor grade sponge titanium technology upgrading and transformation project plans to add 25000 tons of production capacity. In 2021, the company’s R & D expenditure was 1.010 billion yuan, a year-on-year increase of 87.53%, accounting for 4.91% of its operating revenue. By increasing R & D investment and promoting technological innovation, the company has accumulated advanced production line modeling and equipment large-scale innovative production technologies for iron phosphate, lithium iron phosphate and graphite negative electrodes. With rich production experience of “large chemical industry and low cost”, complete the transformation and industrial innovation from the leader of titanium industry to the giant of new energy battery materials.
Profit forecast: Based on the price change of titanium dioxide and the information disclosed in the annual report, we adjusted the company’s net profit attributable to the parent company from 2022 to 2023 to 5.256 billion yuan and 5.867 billion yuan respectively (the original value was 5.425 billion yuan and 5.814 billion yuan respectively), increased the profit forecast for 2024 to 6.230 billion yuan, and the corresponding PE was 10.66x/9.55x/8.99x respectively, maintaining the “buy” rating.
Risk tip: the price of titanium dioxide fluctuates greatly; The new capacity is less than expected.
