Long Mang Baili (002601) 2019 Third Quarterly Report Review: Third-quarter results continue to grow and integration has significant advantages

Long Mang Baili (002601) 2019 Third Quarterly Report Review: Third-quarter 杭州桑拿 results continue to grow and integration has significant advantages
Event: The company released the third quarter report for 2019, with revenue of 82 in the first three quarters.7.1 billion (+3.08%), net profit attributable to mother 20.6.6 billion (+4.84%), deducting non-net profit 19.940,000 yuan (ten years +5.44%).Among them, Q3 achieved revenue of 29 in a single quarter.3.4 billion, a five-year growth of 5.67%, an increase of 12 from the previous month.99%, net profit attributable to mother 7.960,000 yuan, an increase of 26 in ten years.41%, an increase of 23 from the previous month.15%, the performance improved significantly from the previous quarter. Q3 iron ore has higher profits, and the new production capacity of titanium dioxide slightly contributed to the company’s Q3 sales gross margin and net profit margin were 44.80% and 27.64%, of which the net interest rate increased by 4 over the same period last year.57 PCTs, continuing the growth trend since the beginning.The company raised the sales price of titanium dioxide twice in August and September. At the same time, the price of iron ore concentrate in western Sichuan increased in Q3 (Panzhihua iron concentrate 59% taste Q3 average price 582 yuan / ton, an increase of 8 than Q2.6%), the company’s iron ore business prices and sales have increased, driving the company’s net interest rate to rise.In addition, the company’s second-phase chloride production capacity is in trial production and commissioning, and has also contributed part of the sales volume of supplementary titanium dioxide.The company’s Q3 performance was slightly lower than our previous expectations, mainly due to the high localization rate of the main units in the second phase of the chlorination method. Although the trial production was successful, the process commissioning process was relatively complicated, so it took longer to fully launch the new capacity.time. The structure of the titanium dioxide industry is gradually improving, and the company’s profit is expected to continue to improve. The length of floor space under construction in September 20198.70%, there is continuous support for the demand for titanium dioxide.At present, the price difference between titanium dioxide and titanium concentrate is still at a relatively high level since 2016. The overall profitability of the industry has not been affected by the weak boom in the chemical industry. Most titanium dioxide production enterprises are still in a better profit situation.With the improvement of environmental protection requirements to promote the industry’s supply-side reform, the overall industry structure has gradually improved, and the inventory of the Q3 industry has dropped significantly. We are optimistic that the company’s subsequent profitability will continue to increase. The acquisition of Xinli Titanium Industry, the company’s integration strategy, and further the company’s acquisition of Yunnan Xinli Titanium Industry, the advantages of the entire industry chain become more obvious.Xinli Titanium Industry has 500 tons of titanium titanium ore resources, 6 tons of chlorinated titanium dioxide, and 1 ton of titanium sponge production capacity.The current production of Xinli General is progressing smoothly. High titanium slag and sponge titanium have been resumed. Titanium dioxide is expected to resume production in November.In addition, the company plans to build 3 short-term high-end titanium alloy projects, and 50 short-term Panxi titanium concentrate upgrade and conversion to titanium chloride slag projects. After the company puts into operation, the company’s advantages in the entire industrial chain will continue to increase. We are optimistic that the company will build an integrated titanium industry chain. Risk warning: The price of titanium dioxide fluctuates, and the progress of digestion of new chloride production capacity exceeds expectations. Investment suggestion: Maintain “Buy” rating. We expect net profit attributable to mothers to be 29 in 2019-2021.4/36.8/44.300 million, a year-on-year growth rate of 28.7/25.2/20.4%, diluted EPS = 1.50/1.81/2.18 yuan, currently corresponding to PE = 8.4/6.7/5.5.We are optimistic that the company will build an integrated titanium industry chain for a long time and maintain a “Buy” rating.