LB Group(002601)2024-10-30 01:42Investment Rating - The investment rating for Longbai Group is "Buy" (maintained) [1] Core Views - The third-quarter performance showed a quarter-on-quarter improvement, with the company expanding its titanium industry chain integration [1] - In Q3 2024, the company achieved revenue of 7.081 billion yuan, a year-on-year increase of 0.85% and a quarter-on-quarter increase of 8.77% [1] - The net profit attributable to the parent company was 842 million yuan, a year-on-year decrease of 4.29% but a quarter-on-quarter increase of 9.33% [1] - The gross profit margin for Q3 was 25.81%, a decrease of 0.87 percentage points quarter-on-quarter [1] - The report indicates that the titanium dioxide price has declined, impacting the gross margin, but the company expects revenue and performance to maintain positive growth due to improved production and sales volume [1] Summary by Sections Financial Performance - In Q3 2024, the average price of titanium dioxide was 15,405 yuan per ton, a quarter-on-quarter decrease of 4.7% [1] - The average prices for titanium concentrate and sponge titanium were 0.2 and 4.7 million yuan per ton, with quarter-on-quarter changes of +2.0% and -8.3% respectively [1] - The company anticipates that as high-cost enterprises in the industry gradually reduce production and inventory levels normalize, titanium dioxide prices will have upward potential [1] Industry Integration - The company has enhanced its vertical integration in the titanium industry chain, which is expected to provide a second growth opportunity [1] - Longbai Group's self-sufficient titanium concentrate rate is approximately 50% in 2024, with ongoing projects to further increase resource supply capacity [1] - A strategic cooperation framework agreement with Sichuan Resources Group is expected to broaden the company's supply channels and enhance supply chain resilience [1] Financial Projections - Revenue projections for 2024, 2025, and 2026 are 26.794 billion, 29.864 billion, and 32.566 billion yuan respectively, with year-on-year growth rates of 11.5%, 9.0%, and 13.4% [3] - The net profit attributable to the parent company is projected to be 3.429 billion, 4.153 billion, and 4.890 billion yuan for the same years, with corresponding growth rates of 6.3%, 21.1%, and 17.8% [3] - The gross margin is expected to improve to 30.2%, 31.6%, and 32.5% over the next three years [3]