Long Mang Baili (002601): Titanium Dioxide Price and Rising Costs Lead to 1H19 Profit Growth

Long Mang Baili (002601): Titanium Dioxide Price and Rising Costs Lead to 1H19 Profit Growth
Results review 1H2019 results are in line with our expectations Long Mang Baily announced 1H2019 results: revenue 53.840,000 yuan, an increase of 1% in ten years; net profit attributable to mothers 12.700 million, down 5 every year.3%, corresponding profit 0.62 yuan, basically in line with our expectations.The decrease in profit was mainly due to the decrease in the price of titanium dioxide and the decrease in gross profit, as well as the increase in expenses during the period.51 trillion.In the second quarter of 19, the company realized revenue of 25.9.6 billion, down 5% / 7% from the same period last month, and net profit attributable to the mother 6.4.7 billion, a year-on-year decrease of 13% and a month-on-month increase of 4%.  Development Trend The decline in the price of titanium dioxide has led to a restructuring of revenue and gross profit margin.1H19 company’s titanium dioxide income 43.7.4 billion, down 2 every year.96%; Titanium dioxide sales 30.74 for the first time, with an annual increase of 2.3%, of which 16 tons of titanium dioxide are exported, and the export volume accounts for 52% of the company’s titanium dioxide sales; the price of titanium dioxide has decreased by 5 every year.1% (-765 yuan / ton) to 14,230 yuan / ton; affected by the decline in the price of titanium dioxide, the gross profit of the titanium dioxide business in 1H19 declined.59 ppm, gross margin temporarily reduced by 2.25pct to 42.99%.In 1H19, the company’s sales of iron concentrates increased by 155, benefiting from the rise in iron concentrate prices, and the income of iron concentrates increased by 45.4% to 5.48 ppm, gross margin extension increased by 11.4pct to 52.2%.  The expansion of the production capacity of the chlorination method contributed to the growth, and the integrated layout enhanced profitability.At present, the first line of the chlorination project expected by the company 20 has been successfully put into operation. The company expects that batch products will be put on the market in the second half of the year, and the second line will also complete system commissioning and operation as soon as possible.The total production capacity of chlorinated titanium dioxide will reach 30 times. In addition, the release of production 北京夜网 capacity will help the performance increase.At the same time, the company will use the titanium concentrate resources in Panxi area to build 30 to replace the titanium chloride slag project, which can fully meet the second phase 20 production of chlorinated titanium dioxide production, which will further improve the company’s industrial chain and enhance profitability.  The acquisition of Xinli Titanium will help the company expand its business and improve its industrial chain.Xinli Titanium Industry has a complete supporting production line for the chlorination process. The production capacity of chlorinated titanium dioxide is 6. It also has a sponge titanium production line and an 8-inch high titanium slag production line.At present, the company is committed to the reproduction of Xinli Titanium. We expect that the 杭州桑拿网 short-term change in the acquisition of Xinli Titanium will have a certain impact on the company’s performance, and the long-term expansion of the company’s titanium dioxide scale and industry chain will be positive.  Earnings forecasts and estimates remain at 27/32 megabytes for 2019/2020 net profit forecasts.Currently the company is in line with the corresponding 2019/20 P / E ratio of 10.2/8.6x.Maintain target price of 20 yuan, compared with 47 in the past.8% growth space, target price corresponding to 2019/20 P / E ratio of 15 / 13x, maintain outperformed industry rating.  Risk chlorination project progress exceeded expectations, titanium dioxide prices fell.