Revenue increased year-on-year in 2023, and production and sales of titanium dioxide and titanium sponge reached new highs. In 2023, the company achieved operating income of 26.765 billion yuan, a year-on-year increase of 11.00%; net profit to mother was 3.26 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; net profit to mother was 951 million yuan, an increase of 64.15% over the previous year. In 2023, the company produced 1.1914 million tons of titanium dioxide, an increase of 20.36% over the previous year, and sold 1.1589 million tons of titanium dioxide, an increase of 24.93% over the previous year.
It produced 51,800 tons of titanium sponge, an increase of 36.05% over the previous year, and sold 47,000 tons of titanium sponge, an increase of 28.15% over the previous year. The company has effectively improved the utilization rate of titanium dioxide and titanium sponge production capacity, especially the effective release of chlorinated titanium dioxide and titanium sponge production capacity. Production and sales of titanium dioxide and titanium sponge reached new highs, the market share was further increased, and the leading position was further consolidated.
Joint development between the two mines is progressing at an accelerated pace, increasing the self-sufficiency rate of raw materials. In 2023, the company actively promoted the two core projects of “Joint Development of Two Mines in Honggebei Mining Area” and “Xujiagou Iron Mine Development”, and is committed to improving its own resource supply capacity. The company has successively acquired Sichuan Longbo Titanium Industry Co., Ltd., Yunnan Metallurgical Xinli Titanium Co., Ltd., Jinchuan Group Co., Ltd. Titanium factory assets, Hunan Oriental Scandium Industry Co., Ltd., and the company has successively invested in the construction of 400,000 tons of chlorinated titanium dioxide production line, 500,000 tons of Panxi titanium concentrate upgrade to titanium chloride slag project, and a green manufacturing project for sulfur-chlorine-coupled titanium materials with an annual output of 300,000 tons.
The company continues to advance project construction. The company will accelerate the release of production capacity of Lufeng Titanium's 200,000 tons/year chlorinated titanium dioxide production line project, accelerate the construction of Yunnan Guotai's 30,000 tons/year rotor-grade sponge titanium intelligent manufacturing technology improvement project phase II (15,000 tons) and Gansu Guotai 30,000 tons/year rotor-grade sponge titanium technology upgrading and transformation project phase II (15,000 tons) to increase sponge titanium production capacity and continuously reduce production costs.
Profit forecasting and investment ratings. We expect the company's 2024-2026 net profit to be 3.795 billion yuan, 4.376 billion yuan, and 4.960 billion yuan, and EPS of 1.59 yuan, 1.83 and 2.08 yuan. Referring to companies in the same industry, we believe that the reasonable valuation is 15-17 times PE in 2024, and the reasonable value range is 23.85-27.03 yuan, maintaining an superior market rating.
Risk warning: downstream demand falls short of expectations; project progress falls short of expectations; risk of prices falling due to increased competition.