Xiangtan Electrochemical Industry: the double increase of net profit in the first half of the year is due to the vigorous production and sales of Electrolytic Manganese dioxide

SMM, Sept. 4 / PRNewswire-Asianet /-

Core Tips:

Net income increased in the first half of the year

Main business situation

Future operating situation is expected

On August 10, Xiangtan Electrochemical announced its financial report for the first half of the year. In the first half of the year, the company's revenue was 434 million yuan, an increase of 27.55 percent over the same period, and the net profit attributable to the shareholders of the listed company was 30.38 million yuan, an increase of 38 percent over the same period, with a basic earnings per share of 0.09yuan. It increased by 50% over the same period.

Xiangtan Electrochemical believes that the performance is mainly driven by the production and marketing of electrolytic manganese dioxide products, output and sales volume are increased compared with the same period last year, the average unit price of products increased, and the profit level increased. The sewage treatment business runs smoothly and the profit is stable.

The main Business of Xiangtan Electrochemical Industry

The company is mainly engaged in two aspects of business: battery materials business and sewage treatment business.

1. Battery material business

The leading product of battery material business is electrolytic manganese dioxide, which is used in the production of primary battery and secondary battery. It adopts the business model of "R & D-production-sale", according to the different types of batteries applicable to it. It can be subdivided into P type, alkali manganese type, high performance type, lithium manganese type and lithium manganate type. The product structure of the company is continuously optimized, dominated by alkali manganese type, and is gradually developing to high technology, high added value lithium manganese type and high performance type. The scale of the company's electrolytic manganese dioxide products has been further expanded, and the company is the largest enterprise in the industry with the largest production scale, the most complete product types and strong competitiveness, and is in a leading position in the industry. At present, the company is in the rapid development stage of transformation and upgrading, the speed of development is affected by the development of the downstream battery industry and the company's own competitiveness.

2. Sewage treatment business

Sewage treatment business adopts the business model of "government licensing, government procurement, enterprise management", which has rigid characteristics, is not easy to be affected by macro-economy, and has relatively stable income, profit and cash flow. Through the centralized treatment of urban sewage, the sewage treatment business of the company realizes that the effluent quality meets the first class A standard of urban sewage treatment plant pollutant standard (GB18918-2002), protects the water quality and ecological environment in the area, and has good social benefits. At present, the scale of the company's sewage treatment business is relatively small, the existing sewage treatment design capacity of 210000 cubic meters per day (excluding the commissioned Jiuhua sewage treatment plant).

Composition of operating income: (sub-industry)

From the table, we can find that the revenue of the battery materials business accounts for 80.39% of the total revenue. Xiangtan Electrochemical believes that from an international point of view, The trend of battery production capacity transfer to Southeast Asia and China in developed countries in Europe and the United States is still continuing. From the domestic point of view, the production capacity of the main zinc-manganese battery factories in China is expanding, the concentration is further improved, and the domestic electrolytic manganese dioxide market demand is increasing. With the national environmental protection supervision and local environmental protection supervision becoming stricter, the electrolytic manganese dioxide industry is facing greater pressure on environmental protection, and some enterprises are facing the risk of closure and rectification because of substandard environmental protection and other reasons. On the other hand, the secondary lithium manganate battery for new energy vehicles increases the demand for lithium manganate special electrolytic manganese dioxide.

In the first half of 2018, the production of electrolytic manganese dioxide in the two factories of the company operated continuously and stably at full load. With the continuous expansion of the size of the company and the gradual embodiment of the advantages of product research and development, the profitability has been steadily improved. From January to June 2018, the company's electrolytic manganese dioxide business achieved business income of 349.4828 million yuan, an increase of 27.43 percent over the same period last year, of which lithium manganate special type realized business income of 66.6925 million yuan, an increase of 85.11 percent over the same period last year. During the reporting period, a total of 41751.29 tons of electrolytic manganese dioxide were produced, an increase of 50.48 percent over the same period last year, and a total of 37195.21 tons of electrolytic manganese dioxide was sold, an increase of 24.10 percent over the same period last year.

Composition of operating income: (sub-products)

According to the market demand, the company scientifically and efficiently organizes the production of electrolytic manganese dioxide products. The year-on-year increase in production is mainly due to the expansion of production capacity after the annual production of 10, 000 tons of high-performance electrolytic manganese dioxide last year and Jingxi Electrochemical's annual production of 6000 tons of high-performance lithium manganate battery cathode materials. During the reporting period, the company continued to promote the bidding procurement of bulk materials, and through the analysis of market trends, lock in the price ahead of time, in order to ensure the demand for materials and materials at the same time strictly control the procurement cost; Continue to optimize the production process, promote automatic upgrading of equipment, improve production efficiency, strengthen cost assessment and management; Continue to adopt differential competition strategy, seize market opportunities, increase sales efforts, actively open up the market, increase market share; Continue to improve environmental protection facilities, resolutely comply with environmental standards, and implement the concept of environmental protection in every link of production, publicity to every employee, the real realization of environmental protection is competitiveness.

In the first half of the year, the company's annual output of 10,000 tons of high-purity manganese sulfate project is in the customer promotion stage; the holding subsidiary Jingxi Electrochemical 20,000 tons of high-performance lithium manganate battery cathode material project is in the construction period.

Industries, products or regions that account for more than 10% of the company's operating income or operating profit:

Future operating situation is expected

Xiangtan Electrochemical is expected to have operating results of 49.12 to 73.97 per cent from January to September 2018, with a net profit range of 6000 to 70 million yuan belonging to shareholders of listed companies.