Main points of investment:
The company released the 2022 mid-term report, the performance exceeded market expectations. During the reporting period, the company achieved revenue of 8.248 billion yuan, an increase of 16.04% over the same period last year, and a net profit of 1.073 billion yuan, an increase of 55.52% over the same period last year. The company's second-quarter net profit was 603 million yuan, up 28.23% from 470 million yuan in the first quarter and 71.49% over the same period last year.
Vanadium products business has increased significantly, titanium dioxide business has declined. During the reporting period, the company's vanadium products business output reached 23500 tons (in terms of V2O5, the same below), an increase of 1.73% over the same period last year; the average selling price of vanadium products was 13.67 million yuan per ton, up 41.3 percent over the same period last year; the cost per ton of vanadium was 870,000 yuan per ton, up 22.32 percent over the same period last year; and the gross profit per ton of vanadium was 4.98 million yuan per ton, an increase of 93.83 percent over the same period last year. The company's vanadium business operates steadily after the acquisition of Xichang vanadium products, and the price in the same period of 21 years is relatively low, superimposed by geo-conflict, and the vanadium price of 22H1 rises significantly, resulting in a substantial increase in vanadium business profits. In terms of titanium dioxide, the company's output in the first half of the year was 130400 tons, an increase of 6.28 percent over the same period last year; the selling price per ton was 162,000 yuan per ton, which was basically the same as the same period last year; the cost per ton was 13700 yuan per ton, up 11.01 percent from the same period last year; and the gross profit per ton was 0.25,000 yuan per ton, down 38.54 percent from the same period last year. Titanium dioxide business, affected by the decline in downstream paint demand, the profit situation has dropped.
The management level is maintained to be efficient, and the R & D investment is strengthened. The cost during the company period was 127 million yuan, an increase of 31 million yuan over the same period last year, or 32% over the same period last year, mainly due to the impact of changes in financial expenses. Of this total, management expenses were 0.8 yuan, down 1 million yuan from the same period last year, down 1.34% from the same period last year; sales expenses were 62 million yuan, up 3 million yuan from the same period last year, up 5.32% from the same period last year; and financial expenses were-15 million yuan, up 28 million yuan from the same period last year, due to the decrease in interest income in the current period. In addition, the R & D investment in the current period was 295 million yuan, an increase of 90 million yuan over the same period last year, an increase of 44% over the same period last year, mainly due to the strengthening of scientific research investment in this period and the rapid progress of related projects.
The high growth of wind power photovoltaic brings storage demand, and the policy catalyses the development of vanadium battery industry with high safety. Carbon neutral and downwind photovoltaic high-speed growth, superimposed 10% to 20% of the proportion of storage, a broad space for energy storage. Considering that pumped energy storage is restricted by geographical factors, it is urgent to develop electrochemical energy storage. At the end of June 22, the National Energy Administration issued "25 key requirements for preventing Electric Power production Accidents (2022 Edition) (draft for soliciting opinions)". The policy side focuses on the safety of electric energy storage, so the vanadium battery path with high safety stands out. It is expected that the permeability of vanadium battery in the new electrochemical energy storage will increase to 15% in 2025, corresponding to the new installation of vanadium battery about 8GWh, the demand for vanadium in the field of energy storage will increase greatly.
The accelerated scale of the vanadium battery industry has contributed to the sustained growth of the company's performance. Under the background of the rapid growth of energy storage demand in the future, it is expected that policy catalysis will accelerate the scale of vanadium battery. As the leader of vanadium and titanium resources, the company accounts for about 32% of the country's vanadium output. It not only mastered the self-developed vanadium battery electrolyte technology, but also has deep cooperation with Dalian Rongke, the downstream vanadium battery leader, and is expected to benefit from both resources and electrolyte links. We keep the company's original profit forecast unchanged, the EPS for 22-24 is 0.28,0.31 and 0.33 respectively, and the current stock price is 24,22,20 times the PE for 22-24. Maintain a "buy" rating.
Risk hint: vanadium battery industry scale progress is not as expected; downstream demand falls, vanadium price is lower than expected.
