\u3000\u3 China Vanke Co.Ltd(000002) 601 Lb Group Co.Ltd(002601) )
Event: on April 12, the company released its annual report for 2021: it achieved a revenue of 20.566 billion yuan, a year-on-year increase of 45.77%; The net profit attributable to the parent company was 4.676 billion yuan, a year-on-year increase of 104.33%; The weighted average return on net assets was 27.05%, an increase of 10.87 percentage points year-on-year. The gross profit margin of sales was 41.93%, with a year-on-year increase of 6.58 percentage points; The net profit margin on sales was 23.03%, up 6.53 percentage points year-on-year.
Among them, Q4 achieved a revenue of 5.311 billion yuan in 2021, a year-on-year increase of + 25.77% and a month on month increase of - 2.42%; The net profit attributable to the parent company was 846 million yuan, with a year-on-year increase of + 149.48% and a month on month increase of - 39.42%; The weighted average return on net assets was 4.52%, an increase of 2.12 percentage points year-on-year and a decrease of 3.37 percentage points month on month. The gross profit margin of sales was 39.96%, with a year-on-year increase of 11.88 percentage points and a month on month decrease of 5.14 percentage points; The net profit margin of sales was 16.17%, an increase of 7.80 percentage points year-on-year and a decrease of 10.33 percentage points month on month.
Comments:
The volume and price of titanium dioxide powder rose at the same time, helping the company's performance to a new height. In 2021, the company's performance hit a record high, including a revenue of 20.566 billion yuan, a year-on-year increase of 45.77%; The net profit attributable to the parent company was 4.676 billion yuan, a year-on-year increase of 104.33%. The company's profits achieved rapid growth. On the one hand, the company benefited from the improvement of the capacity utilization of titanium dioxide by chlorination and sponge titanium, driving the increase of sales. In 2021, 877800 tons of titanium dioxide were sold, with a year-on-year increase of + 5.46%, of which 621200 tons were sold by sulfuric acid method, with a year-on-year increase of - 2.75%, and 256600 tons were sold by chlorination method, with a year-on-year increase of + 32.52%; Sponge titanium sold 14000 tons in the whole year, a year-on-year increase of + 71.6%. On the other hand, the company's titanium dioxide is highly prosperous and the price continues to rise. Since 2021, the company has issued 10 price increases of titanium dioxide, with a cumulative increase of 7400 yuan / ton for Chinese customers and 1250 dollars / ton for international customers. Meanwhile, according to Zhuo Chuang information, the average price of rutile blr-601 titanium dioxide of the company reached 20444 yuan / ton in 2021, with a year-on-year increase of 37.79%.
In terms of sectors, the company's titanium dioxide business achieved a revenue of 15.199 billion yuan in 2021, a year-on-year increase of + 38.79%, and the gross profit margin reached 45.02%, an increase of 9.03 percentage points year-on-year; The revenue of iron series products reached 2.11 billion yuan, a year-on-year increase of + 10.72%, and the gross profit margin reached 48.57%, a year-on-year increase of 4.88 percentage points; Sponge titanium and carbon tetrachloride business achieved a revenue of 1.292 billion yuan, a year-on-year increase of + 58.99%, and the gross profit margin reached 22.39%, an increase of 10.53 percentage points year-on-year; Zirconium products achieved a revenue of 977 million yuan, a year-on-year increase of + 341914%, and a gross profit margin of 21.07%, an increase of 9.04 percentage points year-on-year.
In Q4 of 2021, the company realized a net profit attributable to the parent company of 846 million yuan, with a year-on-year increase of + 149.48% and a month on month decrease of - 39.42%. On the one hand, due to the rise of upstream costs, the gross profit margin decreased month on month, of which the gross profit margin of 2021q4 reached 39.96%, with a year-on-year increase of + 11.88 percentage points and a month on month decrease of - 5.14 percentage points; On the other hand, the provision for Q4 sales and management expenses of the company increased, with a month on month increase of 68 million yuan and 159 million yuan respectively.
In terms of period expenses, the ratio of sales / management / financial expenses of the company in 2021 reached 2.27% / 10.30% / 0.86% respectively, with a year-on-year increase of + 0.01 / + 2.36 / - 0.29 percentage points. The increase of management expenses was mainly due to the increase of equity incentive and workshop repair expenses; In 2021, the net cash flow from the company's operating activities reached 4.328 billion yuan, a year-on-year increase of 38.71%, mainly due to the increase of operating income.
The production capacity of high-end chlorinated titanium dioxide continues to expand, and the leading position of titanium dioxide continues to consolidate
The company is a leading enterprise of titanium dioxide in the world, with the whole industrial chain of "ilmenite mining and beneficiation - titanium concentrate - titanium dioxide". At present, the production capacity of titanium dioxide reaches 1.01 million tons / year, including 650000 tons / year of titanium dioxide by sulfuric acid method and 360000 tons / year of titanium dioxide by chlorination method. The quality of titanium dioxide by chlorination method is comparable to the international leading level. In order to further expand the production capacity of titanium dioxide and improve the market share of products, the company actively arranges the production capacity of 200000 t / a chlorinated titanium dioxide in Lufeng, Yunnan and 100000 t / a chlorinated titanium dioxide in Jiaozuo. At present, the plant construction and equipment installation of Lufeng project in Yunnan are actively carried out, and it is expected to reach the scheduled use state in December 2022; Jiaozuo new material project has started equipment commissioning and will contribute to performance increment in 2022. At the same time, the company also plans to invest 3.5 billion yuan to build a 200000 t / a titanium dioxide chloride and vanadium scandium and other rare metal comprehensive recovery demonstration project in Panzhihua, Sichuan, and invest 1 billion yuan to build a 200000 t / a titanium dioxide post-treatment project in Nanzhang, Henan, which is currently being actively promoted. With the continuous expansion of the company's high-end chlorinated titanium dioxide production capacity, the company's product structure will be further optimized, the proportion of applications in high-end fields will continue to increase, and the market share and comprehensive competitiveness will continue to increase.
Cooperate in lithium ore exploration and layout the whole industrial chain of battery materials
Under the background of double carbon strategy, the company relies on its own industrial chain advantages to actively layout the new energy industry. Using hydrogen peroxide, sodium hydroxide and ferrous sulfate, by-products of titanium dioxide, and combined with the company's experience in powder material R & D and production, the company actively layout lithium iron phosphate cathode material and graphite cathode material. Since the first announcement on August 13, 2021, the company has planned to build 350000 T / a iron phosphate, 350000 T / a lithium iron phosphate and 300000 t / a graphite cathode materials, with significant scale advantages. At the same time, in order to further ensure the supply of raw materials and improve the self-sufficiency rate of raw materials, the company plans to invest 6 million yuan to jointly establish a joint venture with Henan yukuang Kaiyuan mining in Tanzania to cooperate on a local hard rock lithium exploration right of kaiyuanku mining subsidiary.
New energy projects are advancing smoothly, and downstream verification and cooperation are accelerated
The company efficiently promoted the construction of various new energy projects, and the production lines of phase I of lithium iron phosphate project with an annual output of 200000 tons (50000 tons) and phase I of artificial graphite cathode material project with an annual output of 100000 tons (25000 tons) were officially put into operation on March 17 and March 21 respectively. At the same time, the company accelerated downstream verification and cooperation, and successively signed strategic cooperation agreements with BIC battery, Jiewei power, Tianmu pilot and other companies. While determining the purchase quantity of lithium battery anode and cathode materials in the next few years, the company will establish all-round cooperation from products, technology, talents to the industrial chain, complement each other's advantages, share resources, fully tap the potential of their advantageous fields and enhance their core competitiveness.
The continuous expansion of sponge titanium production capacity is expected to bring new highlights to the performance
Sponge titanium is an important raw material for the production of titanium materials. It is widely used in aerospace, biomedicine, chemical metallurgy, marine engineering and other fields. The market scale of sponge titanium in China also increased from 5.86 billion yuan in 2015 to 12.7 billion yuan in 2020, with an average annual compound growth rate of 16.73%. The company has a whole industrial chain of "ilmenite mining and beneficiation - titanium concentrate - high titanium slag - sponge titanium". At present, the company has a production capacity of 15000 tons / year. At the same time, the company actively carries out the construction of new production capacity. The equipment installation and commissioning of phase I (15000 tons) of Yunnan national titanium annual output 30000 tons rotor grade sponge titanium project is under way; The upgrading and transformation project of 10000 t / a sponge titanium production line and the 30000 T / a rotor level sponge titanium technology upgrading and transformation project of Gansu Guoti (with an additional capacity of 25000 tons) are also in the whole equipment installation stage.
With the new production capacity reaching production capacity one after another, sponge titanium is expected to bring new performance growth points to the company.
R & D investment continues to increase, and the company's core competitiveness continues to enhance
In recent years, the company has continued to increase R & D investment and strengthen technical research. In 2021, the company's R & D expenses reached 1.010 billion yuan, a year-on-year increase of 87.53%, accounting for 4.91% of revenue. During the reporting period, the company has successively established and implemented 188 scientific research projects and completed 119. Through continuous R & D investment, the company has made scientific research and breakthrough in the R & D of lithium battery anode and cathode materials, the development of new products by chlorination method, and the comprehensive utilization of scandium and vanadium resources. In terms of research and development of lithium battery anode and cathode materials, the company has accumulated advanced production line standardization, large-scale equipment and innovative production technology of iron phosphate, lithium iron phosphate and graphite anode; In terms of new product development of chlorinated titanium dioxide, the company has implemented five new research and development of chlorinated titanium dioxide, of which two have been mass produced and put on the market, and the other three have entered the stage of trial production or customer introduction, which has enriched the company's series of chlorinated titanium dioxide products and improved the market share. Through continuous scientific and technological innovation, the company has maintained the leading and competitive advantage of technology and products, improved the level of cost control, and continuously enhanced its core competitiveness.
High capital expenditure highlights growth, and equity investment enhances the influence of the industry
Based on the existing titanium dioxide production capacity, the company has carried out vertical and horizontal expansion, and the project construction has been continuously promoted. In 2021, the cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets reached 2.758 billion yuan, a year-on-year increase of 188.52%, reaching a record high. By the end of 2021, the construction in progress of the company had reached 5.436 billion yuan, accounting for 49.18% of the fixed assets. At the same time, the company strengthened long-term equity investment. During the reporting period, the company invested 2.1 billion yuan through its subsidiary Longbai mining and metallurgy to jointly establish Panzhihua revitalization vanadium and titanium resources equity investment center, which is used to invest in relevant enterprises in the vanadium and titanium industry chain nationwide and continuously improve the influence of the company in the industry.
In view of the company's historical profitability and future development plan, we adjusted the company's profit forecast. It is estimated that the company's net profit attributable to the parent company in 2022, 2023 and 2024 will be 5.526, 6.927 and 8.561 billion yuan respectively, and EPS will be 2.32, 2.91 and 3.59 yuan / share, corresponding to PE of 10, 8 and 7 times. Considering the company's leading position in the titanium dioxide industry and the continuous expansion in the fields of new energy materials and sponge titanium, we maintain the "buy" rating.
Risk tips: the implementation of policies, the construction progress of new production capacity is not up to expectations, the contribution performance of new production capacity is not up to expectations, the price of raw materials fluctuates, the change of environmental protection policies, the economy drops sharply, and the price of crude oil fluctuates sharply.
