\u3000\u3 China Vanke Co.Ltd(000002) 978 Sichuan Anning Iron And Titanium Co.Ltd(002978) )
The company announced the first quarterly report of 2022: in 2022q1, the company achieved a revenue of 595 million yuan, a year-on-year decrease of 4.57% and a month on month increase of 30.01%; The net profit attributable to the parent company was 354 million yuan, a year-on-year decrease of 0.99% and a month on month increase of 44.19%; The net profit deducted from non parent company was 350 million yuan, a year-on-year decrease of 0.95% and a month on month increase of 48.49%.
The net profit attributable to the parent company rebounded month on month in 2022q1. Quarter by quarter, the net profit attributable to the parent company in 2022q1 decreased by 04 million yuan year-on-year. The main profit reduction points include gross profit and other / investment income: the decline in gross profit is mainly due to the decline in product prices and the expected year-on-year decline in the output of vanadium titanium iron concentrate. The decline in investment income is mainly due to the decrease in the income of Dongfang titanium industry; Quarter on quarter, the net profit attributable to the parent company in 2022q1 increased by 108 million yuan month on month, the core of which is the gross profit increased by 176 million yuan month on month. It is expected that the main reason is that the sales volume of vanadium titanium iron concentrate rebounded month on month with the output of molten iron, and the sales volume rebounded to flatten the cost, which increased the gross profit margin of Q1 company by 16.52pct to 72.82% month on month.
Future core focus: continuous improvement of titanium recovery rate and extension of industrial chain layout
① outstanding resource advantages and continuous improvement of titanium recovery rate. Panjiatian iron mine owned by the company is one of the core resources of vanadium titanium magnetite in Panxi area. In terms of titanium recovery rate, through technical research, the company reduced the comprehensive utilization grade of raw ore to 13%, increased the use of low-grade raw ore, and improved the titanium separation process to greatly improve the titanium recovery rate. Among them, the IPO raised investment project “vanadium titanium magnetite quality and efficiency improvement technical transformation project” is expected to be completed by the end of this year, while the “vanadium titanium magnetite large-scale, efficient and clean separation and extraction demonstration project” approved in April 2021 will further improve the comprehensive utilization rate of vanadium titanium magnetite resources.
② extend the industrial chain vertically and sign the 60000 ton energy grade titanium material project. Titanium material is the basic material of high-end manufacturing industry. It benefits from the development of downstream fields such as aerospace and ocean engineering, and has broad demand space in the future. In order to realize the strategic layout and long-term planning, combined with Panzhihua’s rich green power resources (hydropower, photovoltaic and wind power resources), the company plans to invest 10 billion yuan to build the whole industrial chain project with an annual output of 60000 tons of “vanadium titanium magnetite sponge titanium ingot, titanium sector energy grade titanium (alloy) materials”, which is constructed in three phases, including 5.5 billion yuan in the first phase and a construction period of 24 months.
Profit forecast and investment suggestions: we believe that thanks to the strong price of titanium concentrate and the completion of technical transformation projects, the output of titanium concentrate is expected to gradually increase. The net profit attributable to the parent company in 202224 is expected to be RMB 1.464/16.72/1.850 billion in turn, and the PE corresponding to the closing price on April 21 is 10x, 8x and 8x. It is covered for the first time and given a “recommended” rating.
Risk tip: the product price fluctuates sharply, the downstream demand is less than expected, and the covid-19 epidemic continues to affect.
