LB Group(002601)2024-10-29 05:07Investment Rating - The investment rating for Longbai Group is "Outperform the Market" [1][3][10] Core Views - In Q3 2024, Longbai Group's revenue reached 7.07 billion yuan, showing a year-on-year increase of 1% and a quarter-on-quarter increase of 9%. The net profit attributable to the parent company was 840 million yuan, down 4% year-on-year but up 9% quarter-on-quarter. The growth in revenue and net profit was primarily driven by the increase in production and sales of titanium dioxide [1][4][8]. - The export volume of titanium dioxide in Q3 2024 increased by 12% year-on-year, with prices rising in some overseas regions. However, the domestic market showed weak supply and demand, leading to a decline in average prices [1][6][7]. - The price of titanium concentrate remained stable at a high level, while iron ore prices showed a downward trend. The average price of titanium concentrate was 2,227 yuan per ton, up 4% year-on-year and 1% quarter-on-quarter [7][8]. Financial Performance and Forecast - Revenue and net profit forecasts for Longbai Group for 2024-2026 have been slightly adjusted downwards to 3.395 billion yuan, 4.055 billion yuan, and 4.704 billion yuan respectively, with corresponding EPS of 1.42 yuan, 1.70 yuan, and 1.97 yuan. The current stock price corresponds to PE ratios of 14.1, 11.8, and 10.2 for the respective years [1][2][11]. - The company's EBIT margin is projected to improve from 17.6% in 2024 to 20.6% in 2026, while the net asset return (ROE) is expected to increase from 14.7% to 19.3% over the same period [2][11]. Market Dynamics - The domestic titanium dioxide market is experiencing weak supply and demand, with the average price of rutile titanium dioxide in Q3 2024 at approximately 15,148 yuan per ton, down 4% year-on-year and 6% quarter-on-quarter. In contrast, the European titanium dioxide price increased by 16% to 3,360 USD per ton due to anti-dumping tariffs [1][6][8]. - The sponge titanium market is under pressure with prices declining, averaging 48,212 yuan per ton in Q3 2024, down 14% year-on-year and 8% quarter-on-quarter [8][9]. Conclusion - Longbai Group maintains a strong position in the titanium dioxide industry, with an increasing self-sufficiency rate in titanium concentrate. However, the continuous growth in titanium dioxide production is intensifying market competition, and demand in some regions is affected by macroeconomic conditions [1][3][10].