LB Group(002601) 华泰证券·2025-04-24 09:06Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company demonstrates strong resilience as a market leader, with significant dividends reflecting management confidence [1] - The integrated advantages in the titanium dioxide sector support good profitability, although margins in iron and titanium products remain under pressure [2] - The industry landscape for titanium dioxide is expected to improve, with dividends and share buybacks showcasing the company's confidence [3] - Profit forecasts have been adjusted downward due to ongoing pressures in downstream demand, with expected net profits for 2025-2027 revised to 2.9 billion, 3.7 billion, and 4.2 billion RMB respectively [4] Summary by Sections Financial Performance - In 2024, the company achieved revenue of 27.51 billion RMB, a year-on-year increase of 2.8%, while net profit attributable to shareholders was 2.17 billion RMB, down 33% year-on-year [1] - The company reported a revenue of 7.05 billion RMB in Q1 2025, a decrease of 3% year-on-year, with a net profit of 690 million RMB, down 28% year-on-year [1][2] Product Performance - Titanium dioxide sales increased by 8.3% to 1.254 million tons in 2024, with revenue rising by 6.8% to 18.98 billion RMB, despite a 1.3% decrease in average price [2] - The company's gross margin for titanium dioxide improved by 2.8 percentage points to 31.4% due to integrated raw material advantages [2] Market Outlook - The price of titanium dioxide has seen slight increases, with the sulfuric acid method priced at 14,800 RMB/ton and the chloride method at 18,100 RMB/ton as of April 18 [3] - The company is expanding its integrated raw material advantages through ongoing development projects, which are expected to maintain a low-cost competitive edge in the medium to long term [3] Valuation and Estimates - The target price for the company is set at 19.20 RMB, based on a 16x PE ratio for 2025, reflecting a strong market position despite downward adjustments in profit forecasts [4][6] - The company’s estimated EPS for 2025 is projected at 1.20 RMB, with a downward revision from previous estimates [4][5]