\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 456 Baoji Titanium Industry Co.Ltd(600456) )
Core view
The company’s performance increased by 55%. In 2021, the annual revenue was 5.246 billion yuan (+ 20.9%), the net profit attributable to the parent company was 560 million yuan (+ 54.5%), the net profit not attributable to the parent company was 514 million yuan (+ 61.3%), and the net cash flow from operating activities was 206 million yuan (- 49.0%). In the fourth quarter, the single quarter revenue was 631million yuan (-44.5%), the net profit attributable to the parent company was 89million yuan (-26.5%), and the net profit not attributable to the parent company was 76million yuan (-20.9%). The change in net cash flow from operating activities is mainly due to the increase in cash paid for the purchase of materials and the increase in inventory. Profit distribution plan: distribute cash dividend of 8.50 yuan for every 10 shares to all shareholders.
The profitability of the company remained stable. The gross profit margin of titanium products of the company in 2021 was 23.38%, slightly lower than that in 2020, due to the rise in the price of sponge titanium, the main raw material in 2021; The return on net assets of the company in 2021 was 9.6%, slightly higher than the level in 2020. The net operating cash flow was 206 million yuan, which deviated from the net profit to some extent. The reason is that with the expansion of the company’s production and sales scale, the increase of operating receivables and the increase of inventory. During the period of the company, the expense rate decreased to 9.5%, of which the financial expense rate and management expense rate decreased significantly. By the end of 2021, the company’s asset liability ratio was 44.9%, significantly lower than 50.1% at the end of 2020.
Tap potential and increase efficiency, with large output elasticity. In 2021, the output of titanium products of the company was 27807 tons, with a year-on-year increase of 48%, and the sales volume of titanium products was 26637 tons, with a year-on-year increase of 41%; In 2021q4, the output of titanium products was 7942 tons, with a year-on-year increase of 70.9%, and the sales volume of titanium products was 7072 tons, with a year-on-year increase of 47.8%. In 2021, the company sold 20920 tons of titanium materials, with a year-on-year increase of 48.9%, showing a high output elasticity. In terms of raw material guarantee, BaoTi Huashen, a subsidiary of the company, has expanded the production capacity of 12000 tons of sponge titanium. At present, the construction has been completed. Sponge titanium is the main raw material for the production of titanium materials. The price of sponge titanium fluctuates greatly in recent years. After the expansion of BaoTi Huashen, it has a production capacity of 22000 tons of sponge titanium, which will further enhance the self-sufficiency rate of raw materials and the bargaining power of raw material procurement of the company.
Risk tip: the price of sponge titanium has risen sharply; The epidemic affects downstream demand.
Investment advice: maintain the “buy” rating.
Assuming that the price of sponge titanium in China is 75000 yuan / ton from 2022 to 2024, the price of high-end titanium materials of the company remains unchanged, the processing cost of civil titanium materials remains at the current level, and the raised investment project is implemented as planned, the operating revenue of the company is expected to be 7.055/85.909633 billion yuan from 2022 to 2024, with a year-on-year growth rate of 34.5/21.8/12.1%, the net profit attributable to the parent company is 8.15/10.171192 billion yuan respectively, with a year-on-year growth rate of 45.4/24.8/17.3%, and the diluted EPS is 1.71/2.13/2.50 yuan respectively, The current share price corresponds to PE 28 / 23 / 19x. The company is an absolute leader in China’s titanium industry. With the opportunity of upgrading titanium materials in the aerospace field and improving the localization rate, the company has optimized and upgraded its product structure and enhanced its profitability. With the opportunity of transformation of international aviation titanium supply chain, the company has further explored the international market, raised investment projects have been successfully put into operation, consolidated the company’s leading position, strong growth certainty and maintained the “buy” rating.
