LB Group(002601) -·2025-01-17 02:53Investment Rating - The report maintains a "Buy" rating for Longbai Group with a target price of RMB 24.30 per share [4][5]. Core Insights - The titanium dioxide market remains under pressure due to anti-dumping tax policies and weak seasonal demand, leading to losses in the sponge titanium and new energy materials segments [2][3]. - Longbai Group plans to achieve titanium concentrate production capacity of 2.48 million tons and iron concentrate capacity of 7.6 million tons by the end of 2025, with tight supply expected to keep titanium concentrate prices fluctuating at high levels [3][4]. - The company continues to export titanium dioxide to Europe and Brazil despite the imposition of anti-dumping duties, with some marginal producers reducing output or halting production [3][4]. Summary by Sections Market Performance - In Q4, Longbai Group's titanium dioxide sales were approximately 300,000 tons, with total annual sales nearing 1.25 million tons. The market faced challenges from anti-dumping taxes and seasonal demand weakness, resulting in a slight loss during exports to the EU [2][3]. Production Capacity and Strategy - The company anticipates a titanium concentrate output of 1.3 to 1.4 million tons in 2024, with Q4 prices experiencing seasonal fluctuations. The sponge titanium segment saw a slight increase in sales to 20,000 tons, but price declines led to losses [2][3]. Financial Projections - Revenue projections for Longbai Group show a steady increase from RMB 26.765 billion in 2023 to RMB 36.886 billion by 2028, with net profit expected to rise from RMB 3.226 billion in 2023 to RMB 5.095 billion in 2028 [7]. - The report estimates earnings per share (EPS) to be RMB 1.45 for 2024, increasing to RMB 2.14 by 2028 [7]. Valuation - The target price of RMB 24.30 per share is based on a discounted cash flow (DCF) valuation method, maintaining a weighted average cost of capital (WACC) of 7.4% [4][5].