The company's epitaxial acquisition has entered the titanium dioxide industry, and the new capacity will be put into production soon. By issuing shares and paying cash to buy assets and raise supporting funds, the company acquired 100% equity in Jinhai Titanium Industry and Xianghai Titanium Industry, with a total investment of 1.4 billion yuan. The annual production capacity of titanium dioxide produced by sulfuric acid process in Jinhai titanium industry exceeds 100000 tons, and the production line of titanium dioxide by sulfuric acid process of 100000 tons is being expanded. Xianghai titanium industry has mastered the core technology of titanium dioxide production by chlorination process, and built a new production line of 60,000 tons of titanium dioxide. It is expected to be put into production by the end of 2021, when the company will form 260000 tons of titanium dioxide production capacity. In addition, the company will focus on the layout of titanium dioxide industry chain upstream raw materials and downstream sponge titanium, titanium metal and so on. We believe that with the production of chlorination titanium dioxide, the company is expected to take titanium dioxide as the focus of development and give full play to the advantages of location, resources and integration.
The company has a wide range of products and continues to strengthen the circulation advantage of the industrial chain. The company has developed into a listed company with 100000 tons of titanium dioxide, 300000 tons of ammonium phosphate, 400000 tons of sulfuric acid, 600000 tons of cement, 2500 tons of bromine, 1 million tons of raw salt and 300000 tons of methane chloride. Jinyi Technology, a holding subsidiary, has an annual production capacity of 300000 tons of methane chloride, accounting for about 8% of the national market share, including monochloromethane, dichloromethane and chloroform. Monochloromethane is mainly used in organosilicon production, dichloromethane is mainly used in the production of R32 refrigerant raw materials, trichloromethane is mainly used in the production of HCFC-22 refrigerant raw materials, and can be used as raw materials for fluorine chemical products such as tetrafluoroethylene. In April 2020, the company plans to invest 250 million yuan in the annual production of 5000 tons of tetrafluoroethylene (TFE) and downstream products. In addition, the company plans to invest 60 million yuan to build a pilot plant for the preparation of phosphoric acid and phosphate by hydrochloric acid purification, comprehensively utilize the hydrochloric acid produced by the company and local enterprises, and improve the industrial chain structure of the company's circular economy.
The company's net profit grew rapidly in the first half of 2021. In the first half of 2021, the company achieved an operating income of 2.12 billion yuan, an increase of 61.78% over the same period last year, and a net profit of 272 million yuan, an increase of 152.61% over the same period last year.
The prices of the company's products have risen to varying degrees, of which the price of titanium dioxide rose to 155,000 yuan / ton, an increase of 28.51% over the same period last year; the price of methane chloride was 0.28000 yuan / ton, an increase of 67.40% over the same period last year; and the price of bromine rose to 35,000 yuan / ton, an increase of 39.85% over the same period last year. Jinhai Titanium Industry made a net profit of 196 million yuan in the first half of 2021, while Jinyi Technology made a net profit of 87.07 million yuan in the first half of 2021.
Profit forecast and investment rating. We estimate that the return net profit of the company from 2021 to 2023 is 570 million yuan, 880 million yuan and 1 billion yuan respectively, and the corresponding EPS is 1.07,1.66 yuan and 1.91 yuan. With reference to the valuation of comparable companies in the same industry, we give the company 15-18 times PE in 21 years, and the corresponding reasonable value range is 16.05-19.26 yuan, covering for the first time and giving a rating better than that of the big city.
Risk hint: raw material price fluctuation risk; downstream demand is lower than expected; project progress is not as expected.
