The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 26.765 billion yuan, an increase of 11% over the previous year, and realized net profit of 3.226 billion yuan, a year-on-year decrease of 5.64%.
In the first quarter of 2024, the company achieved operating income of 7.288 billion yuan, an increase of 4.52% over the previous year, and realized net profit of 951 million yuan, an increase of 64.15% over the previous year.
Continued price recovery led to a high increase in the company's performance. In 2023, the company achieved operating income of 26.765 billion yuan, an increase of 11% over the previous year, and realized net profit of 3.226 billion yuan, a year-on-year decrease of 5.64%. In the first quarter of 2024, the company achieved operating income of 7.288 billion yuan, an increase of 4.52% over the previous year, and realized net profit of 951 million yuan, an increase of 64.15% over the previous year. The continued recovery in the price of titanium dioxide is the main reason for the company's high performance. In the fourth quarter of 2023, titanium dioxide rose and remained at a high level, and this trend continued in the first quarter of 2024. The average price of titanium dioxide in the fourth quarter of 2023 was 16,400 yuan/ton, up 8% year on year and 4% month on month. The average price of titanium dioxide in the first quarter of 2024 was 161,000 yuan/ton, up 5% year on year and slightly down 2% month on month. The price of titanium dioxide remained high, supporting the company's strong profitability. The company's gross margin reached 28.35% in the first quarter of 2024, an increase of 5.25 percentage points over the previous year.
Increase resource reserves vertically, promote “titanium-lithium coupling” horizontally, and achieve the company's continuous and diversified development. The company has a production capacity of 1.51 million tons/year of titanium dioxide, ranking third in the world, and 50,000 tons/year of titanium sponge production capacity, ranking first in the world. In 2023, the company actively promoted the two core projects of “Joint Development of Two Mines in the Honggebei Mining Area” and “Xujiagou Iron Ore Development”. It is committed to improving its own resource supply capacity, and strives to achieve an annual production of 7.6 million tons of iron concentrate and 2.84 million tons of titanium concentrate by the end of the 14th Five-Year Plan to ensure the stability and development of the industry. On the other hand, the company uses the by-product ferrous sulfate, surplus production capacity of caustic soda, sulfuric acid, steam, hydrogen, etc., directly or indirectly for the production of lithium battery positive and negative electrode materials, including lithium iron phosphate production capacity of 50,000 tons/year, iron phosphate production capacity of 100,000 tons/year, graphite anode production capacity of 25,000 tons/year, and graphitization capacity of 50,000 tons/year to achieve “titanium-lithium coupling”, which is expected to utilize the cost advantages brought about by industrial chain synergy and enhance the company's performance.
Investment advice: EPS is expected to be 1.71 yuan, 1.96 yuan, and 2.42 yuan respectively in 2024-2026. Maintain a “buy” rating.
Risk warning: Abnormal fluctuations in raw material prices affect the company's product prices and gross profit; project construction progress falls short of expectations; safety and environmental risks, etc.