LB Group(002601) 湘财证券·2024-11-15 01:46Investment Rating - The report assigns a "Buy" rating to Longbai Group (002601 SZ) for the first time [1] Core Views - Longbai Group is a global leader in titanium dioxide production with integrated titanium industry chain advantages [1] - The company has both sulfate and chloride process technologies for titanium dioxide production [1] - It is the world's largest sulfate process titanium dioxide producer and the third largest chloride process producer globally [1] - The company has a strong brand presence with its "Snow Lotus" titanium dioxide products sold in over 110 countries [1] Business Overview - Longbai Group has an annual production capacity of 1 51 million tons of titanium dioxide and 80 000 tons of sponge titanium ranking first globally in both [1] - The company is China's only titanium dioxide producer with a complete titanium industry chain from mining to deep processing [1] - It has self-supply capability for titanium concentrate with a current self-sufficiency rate of about 50% expected to reach 70% by the end of the 14th Five-Year Plan period [1] New Energy Materials Expansion - The company is expanding into new energy materials leveraging its cost advantages in producing lithium iron phosphate (LFP) [1] - It has an annual production capacity of 50 000 tons of LFP and 100 000 tons of lithium iron phosphate [1] - The company is also extracting vanadium from waste acid and slag to provide raw materials for vanadium flow batteries [1] Financial Performance - In the first three quarters of 2024 the company achieved revenue of 20 885 billion yuan a year-on-year increase of 2 97% [2] - Net profit attributable to the parent company was 2 564 billion yuan up 19 68% year-on-year [2] - In Q3 2024 revenue was 7 081 billion yuan up 0 85% year-on-year and 8 77% quarter-on-quarter [2] - Net profit in Q3 was 842 million yuan down 4 29% year-on-year but up 9 33% quarter-on-quarter [2] Financial Forecasts - Revenue is expected to grow from 26 794 billion yuan in 2023 to 33 077 billion yuan in 2026 [3] - Net profit attributable to the parent company is forecasted to increase from 3 226 billion yuan in 2023 to 4 788 billion yuan in 2026 [3] - The company's P/E ratio is projected to decrease from 14 27 in 2023 to 9 62 in 2026 [3] Valuation - The report forecasts the company's P/E ratios for 2024-2026 at 14 04 11 84 and 9 62 respectively [2] - The EV/EBITDA ratios are projected to decrease from 9 53 in 2023 to 6 59 in 2026 [3]