This report is read as follows:
The company's performance in the first half of 2022 is in line with expectations. The volume and price of the company's main products rose in the first half of the year, with the gradual development of the commercialization of vanadium battery, the price of vanadium may continue to be strong, the company will fully benefit from the strong price of vanadium.
Main points of investment:
Maintain the "overweight" rating. The company achieved revenue of 8.248 billion in the first half of 2022, up 16.04% from the same period last year, and realized net profit of 1.073 billion, up 55.52% from the same period last year. Maintain the forecast that the EPS of the company in 2022-24 is 0.24, 0.29, and 0.33 yuan, and the corresponding net profit is 20.42,24.79 and 2.867 billion yuan, respectively. Considering that vanadium battery will promote the rise of vanadium demand, refer to similar companies, give the company a valuation of 35 times PE in 2022, raise the company's target price to 8.4 yuan (original 7 yuan), and maintain the "overweight" rating.
With the rise of both volume and price, the profit of the company accelerated. In the first half of 22, the company sold 23500 tons of vanadium products, up 1.73% from the same period last year. Sales of titanium dioxide and titanium concentrate were 13.04 and 114900 tons respectively, an increase of 6.28% and 4.74% respectively over the same period last year, and the company's output increased steadily. Driven by the boom in downstream demand, the average tax price of vanadium pentoxide (Sichuan, sheet vanadium) was 130,000 yuan / ton in the first half of the year, an increase of 19.0% over the same period last year, while the average tax price of titanium dioxide (East China, rutile) was 20677 yuan / ton, an increase of 5.3% over the same period last year. The demand for vanadium battery is booming and the export of titanium dioxide is good. We expect the demand for vanadium and titanium products to be strong and the price will continue to be strong.
With the commercialization or acceleration of vanadium battery, the demand for vanadium increases steadily. Recently, the national policy has made it clear that "ternary lithium batteries and sodium-sulfur batteries shall not be used in medium and large electrochemical energy storage power stations." The policy side's further increase in energy storage safety requirements may make vanadium batteries become an important way of large and medium-sized energy storage, resulting in an increase in vanadium battery demand. The company deeply ploughs the field of vanadium battery and will fully benefit from the growth of vanadium battery demand.
Excellent cost control, equity incentives to stimulate the potential of the company. In the first half of 22, while the demand is good and the product price is rising, the cost control remains excellent. In addition, the company completed the equity incentive in the first half of the year, we believe that this incentive will effectively stimulate the company's potential, the company's competitiveness may gradually increase.
Risk hint: the progress of vanadium battery technology is slow.
