23H1 homing net profit is-43.8% year-on-year, downgraded to "hold" rating

The company's 23H1 realized revenue of 7.627 billion yuan (yoy-7.53%), net profit of 603 million yuan (yoy-43.8%), and net profit of 274 million yuan (yoy-54.6%, qoq-16.9%) of 23Q2.

Considering the low prosperity of the real estate and iron and steel industries, we lower the price assumption of vanadium and titanium products, and it is estimated that the company's EPS in 23-25 years will be 0.15pm 0.19max 0.21 yuan (previous value 0.21pm 0.25max 0.28 yuan). The average value of PE (2023E) of comparable companies in vanadium and titanium business is 14.74 times respectively. Considering the company's entry into the vanadium battery field and broad growth prospects, the company is valued at 26.6 times PE in 23 years, and the corresponding target price is 3.99yuan (the previous value is 5.25yuan), which is downgraded to "hold" rating.

The prices of vanadium and titanium are lower than the same period last year, and the gross profit margins of vanadium and titanium products are-4.59pct and-6.24pct respectively.

According to the company's semi-annual report, 2023H1's vanadium products (calculated in terms of V2O5, the same below) produced 24240 tons (yoy+3.23%), excluding tax, with an average price of 117,000 yuan per ton (yoy-14.2%) and a gross profit margin of 31.81% (yoy-4.59pct). In terms of titanium products, 2023H1 produces 13.17 and 106400 tons of titanium dioxide and titanium slag respectively (yoy+1.0%,-7.4%), the average price of titanium dioxide excluding tax is 13,000 yuan per ton (yoy-17.5%), and the comprehensive gross profit margin of titanium products is 5.20% (yoy-6.24pct).

Affected by the adjustment of the real estate industry, vanadium and titanium products operate under pressure.

Vanadium is mainly used in the iron and steel industry. Due to the impact of the economic downturn in the iron and steel industry, the demand for vanadium used in the iron and steel industry has decreased. According to Antaike, 23H1, the average tax price of vanadium pentoxide is 1.36 million yuan / ton (yoy-6%), rather than in the steel field, vanadium flow battery energy storage ushered in the opportunity period of commercial development of demonstration projects, which may form a certain demand supplement in the future. Titanium dioxide, as a white pigment, is mainly used in coatings, plastics, papermaking and other fields. affected by the operation pressure of the real estate industry, the average tax price of 23H1 titanium dioxide is 155,000 yuan per ton (yoy-21.4%).

According to the company announcement, the company plans to use its own capital of 54.8251 million yuan to acquire 51% equity of Yangrun Technology in Panzhihua City. The main product of Yangrun Technology is flake V2O5, with a design capacity of 4200 tons / year. It will start formal production in June 2021 and achieve output of 2456.5 tons in 2021 and 3484.89 tons in 2022 respectively. The net profit was 1547.06 yuan and 26.4738 million yuan respectively. After this acquisition, the company's vanadium product capacity will be further expanded, and the design capacity will reach 442,000 tons / year.

Continuously promote the application and development of vanadium in the field of energy storage

According to the company announcement, the company and Dalian Rongke Energy Storage Group jointly invested in the establishment of Vanadium Rong Technology in Panzhihua to build a vanadium electrolyte production line of 2000 cubic meters per year. By May 25, 2023, the production line has completed equipment installation and thermal load commissioning, and formally carried out trial production. The company's supply capacity in the field of vanadium energy storage has been further improved, and it also provides support for the subsequent joint investment with Dalian Rongke in the construction of 60,000 cubic meters / year vanadium electrolyte production line.

Risk tips: downstream demand is not as expected, production expansion progress is not as expected, raw material prices fluctuate.