Long Mang Baili (002601): Yunnan Xinli comprehensively resumes production of titanium industry expansion project to help growth

Long Mang Baili (002601): Yunnan Xinli comprehensively resumes production of titanium industry expansion project to help growth
Recent situation of the company On January 9, we participated in the resumption of the completion of Xinli Titanium Industry of Longman Baili Antiques and the intensive start-up ceremony of major projects in the titanium industry, and exchanged views with the company. Yunnan Xinli ushered in a full-scale resumption of production, and the titanium dioxide and sponge titanium expansion projects started construction.Since the acquisition of Xinli Titanium by Longman Baili in May 2019, the 8-crystal high-titanium slag production line and 1 sponge sponge titanium production line have been successfully resumed in 180 seconds, and the 6 chloride titanium dioxide production line has been improved.At the closing stage, the company expects to resume production by the end of January 2020.At the same time, Xinli Titanium Industry will start the construction of 16 targets / year high titanium slag, 20 targets / year chlorinated titanium dioxide and 3 indicators / sponge titanium project. The company is expected to invest a total of USD 5 billion.LiTitanium will become the world’s largest sponge titanium production base and the nation’s important chloride titanium dioxide production base. 20 Titanium Chloride Titanium Dioxide started to increase steadily, and the titanium chloride slag project progressed smoothly.At present, the first phase 10 of the company’s second-stage chlorinated titanium dioxide reached the production line and the production increased to 6000 tons / month. The second 10-line production line is in the commissioning stage. We expect that the gradual release of the second-phase chlorinated titanium dioxide capacity will helpCompany performance growth.50 Initial Panxi Titanium Concentrate Upgrading and Transformation Construction 30 Progressive construction of the titanium chloride slag project is progressing smoothly. The company is expected to start production at the end of 2020 and it is expected to reach production in 2021. We expect that the cost of titanium chloride titanium dioxide raw materials will be reduced after the project is put into operationEnhance the competition of chlorinated titanium dioxide. Demand for titanium dioxide is expected to improve, and the company’s market share will continue to increase.The real estate team of CICC is expected to increase the real physical completed area of houses across the country by 9% by 2020, which will increase domestic demand for titanium dioxide; exports of titanium dioxide will continue to improve, and monthly exports of titanium dioxide will increase by 6 on January 11, 2019.9% to 90%.3 Initially, we expect that the export volume 南京夜网 of titanium dioxide will exceed 100 inches by 2020.On the supply side, according to our statistics, in 2020, the titanium dioxide industry will mainly increase its output and concentrate on leading enterprises. We expect that the market share and speaking power of leading enterprises will be further enhanced. It is recommended to keep the profit forecast for 2019 unchanged. Taking into account the resumption of production of Xinli Titanium Industry and chloride titanium dioxide, the profit forecast for 2020 is raised by 3% to 32 trillion. The profit forecast for 2021 is 3.7 billion yuan.At present, the company is in line with the corresponding P / E ratio of 2020/21.8/9.4x. Considering the evaluation switch and better company growth, we raise our target price by 17.6% to 20 yuan, corresponding to 17% growth space and 13 / 11x P / E ratio in 2020/21, maintain outperform industry rating. Risks Titanium dioxide prices have dropped, and chlorinated titanium dioxide has started operations lower than expected.