Talk about it every Monday:
Recently, Longbai Group, China Nuclear Titanium dioxide and other listed companies announced that from the beginning of January 2022, the sales prices of various types of titanium dioxide will be raised by as much as 1000 yuan / ton. We believe that the rise in the price of titanium dioxide will play a thickening role in the company's performance, considering that the supply and demand of titanium dioxide is still good, the industry boom pattern is expected to continue next year.
The supply pattern is still good, and the rising cost is one of the driving forces for the continued price increase of titanium dioxide. The mining of global high-grade titanium concentrate (TiO2 ≥ 92%) is slow and declining. Driven by demand, the average year-on-year increase of 46% titanium concentrate has reached 60%. The sharp rise in the price of upstream raw materials provides strong cost support for titanium dioxide. Under the background of the double control policy of energy consumption and stricter environmental protection, the new production capacity is relatively small. In 2021, the effective capacity release of the titanium dioxide industry is only 10-150000. At the same time, with the gradual withdrawal of small and medium-sized enterprises, the titanium dioxide industry will usher in an accelerated reshuffle, and the scale advantage of the industry leader will become more and more prominent.
Export-driven demand: titanium dioxide is widely used in paint, ink, paper, plastics and other industries. Among them, the coating industry is the largest downstream demand for titanium dioxide, accounting for 55%. Export is the key factor to support the demand of titanium dioxide. From the customs sales data, titanium dioxide exports have shown an upward trend for seven consecutive months compared with the same period last year, with a cumulative export volume of 1.0545 million tons from January to October. The export share of the major domestic production enterprises basically accounts for 30%, 40% of the total sales, which plays a positive role in stimulating demand.
Investment strategy: driven by the business cycle of titanium dioxide, the rise in the price of titanium dioxide will thicken the company's performance. Longbai Group, China Nuclear Titanium dioxide and Anada all have outstanding performance forecasts for 2021. Among them, Longbai Group expects to achieve a net profit of 4.577 billion-5.722 billion yuan in 2021, an increase of 100%, 150% compared with the same period last year. Medium nuclear titanium dioxide is expected to achieve a net profit of 1.188 billion-1.426 billion yuan, an increase of 150% over the same period last year. We believe that the rising cost of raw materials such as titanium concentrate provides strong cost support for titanium dioxide, and under the background of double control of energy consumption and export improvement, the economic pattern of titanium dioxide industry is expected to continue. it is suggested that we should pay attention to the industry leaders such as China Nuclear Titanium dioxide and Longbai Group, which have the advantages of scale and cost.
Market Review:
Plate performance: Citic basic chemical sector fell 2.6% this week, Shanghai composite index components fell 0.8%, compared with the Shanghai composite index, the basic chemical sector lagged 1.8 percentage points. As for the sub-plate, the basic chemical sub-plate fell mainly this week, with soda ash, cotton, spandex, titanium dioxide, polyester and other sub-plates leading the increase, while carbon fiber, potash, lithium electrochemicals, inorganic salts and rubber products led the decline.
Individual stocks rise and fall: this week, the basic chemical sector led stocks including Gudi Technology, Yuanxing Energy, ST Red Sun, Outstanding Xineng, ST Dewei, etc., while leading stocks include American Bond shares, GMGM, Yaben Chemical, Haiyou New Materials, Yangtze River Materials and so on.
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, and so on.
