Longbai Group is expected to make a net profit of 5.7 billion yuan in 2021 or boost its performance with titanium dioxide plus new energy [SMM Review]

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Recently, Longbai Group issued an annual performance forecast for 2021, saying that from January 1, 2021 to December 31, 2021, the net profit belonging to shareholders of listed companies was 4.5773732 billion yuan to 5.7217165 billion yuan, an increase of 100% to 150% over the same period last year.

Longbai Group said that during the reporting period, the market for titanium dioxide, the company's main product, was in a business cycle, the sales price increased more than the same period last year, and the utilization rate of existing titanium dioxide capacity increased, especially the company's chlorination production capacity was effectively released. Although the sharp rise in raw and auxiliary material prices and transportation costs have a certain adverse impact on business performance, the company's competitive advantage of vertical integration of the whole industry chain is fully demonstrated. Promote the company's net profit to increase significantly compared with the same period last year.

The company strengthens internal management, collectivizes unified management in procurement, sales and finance, effectively improves the efficiency of operation and management, makes full use of the advantages of economies of scale that have been formed, and continues to promote technological innovation, create unique core technological advantages of vertical integration and horizontal coupling, continue to promote production benchmarking management, reduce cost and increase efficiency, and improve profitability.

With the gradual promotion of M & An integration, the synergy of various M & An assets is gradually brought into full play. During the reporting period, private placement and equity incentives are completed, equity capital is increased, and the financial cost of debt financing is reduced.

It is not surprising that the performance of Longbai Group has greatly increased. Since the beginning of this year, the price of titanium dioxide has continued to rise, and the titanium dioxide industry has set off a wave of price increases for many times. As the leader of the titanium dioxide industry, Longbai Group has raised the price of its titanium dioxide products many times during the year. Among the downstream industries of titanium dioxide, paints, plastics and papermaking account for a relatively large proportion, with paints accounting for about 40%, plastics 20%, papermaking 15%, and the rest in printing ink and other fields. The demand for stock housing and repainting in the domestic paint market is increasing, and the demand in overseas emerging markets is growing rapidly. affected by the epidemic, the demand for plastics and ink has increased. The rise in sales prices of titanium dioxide this year is driven by both demand and cost factors, as well as limited new production capacity in the global market.

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On December 22nd, the average spot price of SMM anatase titanium dioxide was 18000 yuan / ton, up 28.57% from the beginning of this year. However, in recent months, the overall price performance of titanium dioxide is mediocre, and SMM analysis believes that with the leading enterprises issuing price adjustment letters, the domestic titanium dioxide market confidence has been boosted, and titanium dioxide prices have stopped falling to maintain stability, but considering that the current situation of weak demand at the domestic trade side is still continuing, it is difficult to rely solely on overseas markets to pull up titanium dioxide prices, and it is expected that titanium dioxide prices will be dominated by stable operation in the near future.

Prior to this, Longbai Group has also pointed out that the company has ploughed titanium dioxide industry for many years and has won the third place in the world and the first in Asia. In the future, the company will further expand the production capacity of titanium dioxide, stabilize the position of titanium dioxide industry, and actively expand the downstream markets such as titanium alloy, iron phosphate, lithium iron phosphate and graphite anode materials, through years of accumulated large-scale chemical industry, large-scale production experience and technical advantages, continue to create new profit growth points, achieve rapid development during the 14th five-year Plan period, and bring more investment returns for shareholders.

In addition, Longbai Group is also active in the layout of new energy-related industries. On December 1, 2021, the company signed an investment contract with the government of Nanzhang County, Xiangyang City to invest in the construction of a battery-grade lithium iron phosphate project with an annual output of 150000 tons. At present, the new energy material project capacity of the company is: Xiangyang base 100000 tons of iron phosphate, 150000 tons of lithium iron phosphate project, Qinyang base 200000 tons of lithium iron phosphate project, Jiaozuo base 100000 tons of battery negative electrode, 200000 tons of iron phosphate project.

Everbright Securities said that the company is a leading domestic titanium dioxide enterprise, with strong scale advantages and cost advantages, superimposed lithium materials project put into production, its cost advantage and profitability will be further enhanced.