Titanium Dioxide Enterprise's Third-Quarter Growth Slowdown

The four Titanium Dioxide listed companies had good performance in the first three quarters, but their net profit growth began to slow. The reporter learned that in the third quarter, due to the significant reduction in the price adjustment of titanium dioxide enterprises, the gross profit margin has declined. The industry believes that the current price of titanium dioxide in the first quarter of 2018 is unlikely to fluctuate significantly, and the price will tend to be stable.

Benefiting from the dramatic increase in the price of Titanium Dioxide Rutile and the consolidation of the subsidiary Longyi Titanium, Longxun achieved operating revenue of 7.553 billion yuan in the first Pigment And Dye three quarters of the year, an increase of 271.71% year-on-year, and a net profit of 1.921 billion yuan, an increase of 1507.54% year-on-year. The company expects to achieve a net profit of 2.432 billion yuan to 2.653 billion yuan in 2017, an increase of approximately 450% to 500%.

Jinpu Titanium, CNI Titanium Dioxide, and Annada achieved operating income of 1.305 billion yuan, 2.508 billion yuan, and 860 million yuan in the first three quarters respectively, representing an increase of 114.54%, 71.67%, and 49.44% year-on-year, respectively; the corresponding increase in net profit reached 171.42 respectively. %, 558.44%, 554.65%. For the full year results, the three companies are expected to have substantial growth.

It is worth noting that, from a quarterly perspective, the Pvc Resin rapid growth performance began to show signs of a slowdown in the third quarter, and the gross margin of products began to decline.

Excluding the long-profit profit of Longyi Titanium Industry Co., Ltd., the net profit growth of Jinpu Titanium, CNI Titanium Dioxide and Ananda in the first quarter was 239.4%, 353.77% and 310.85%, respectively; It was 186.1%, 2121.95% and 1895.11%. In the third quarter, the net profit growth of the three companies slowed to 137.7%, 97.16% and 190.53%, respectively. Among them, China Telecom’s titanium dioxide and Annada’s performance in the third quarter slowed down Ethylene-Vinyl Acetate significantly.

For this phenomenon, industry insiders told reporters: "The main reason is that the price of titanium dioxide in the second half of the year has dropped. The price has even been corrected in the short term this summer, which has caused the company's gross profit margin to decline." According to its introduction, the upstream price of titanium ore is subject to environmental protection. The factors such as limited production and supply-side reforms have been at a high level, and the demand for downstream coatings, household appliances, plastics, and lithium titanate has been relatively stable. Therefore, the price of titanium dioxide is unlikely to fluctuate significantly in the first quarter of next year.

This view has been recognized by the Jinpu Titanium Industry. In response to a reporter yesterday, the company said that the price of titanium dioxide has been showing a steady state trend, and it is unlikely that the price will rise or fall sharply.

Titanium dioxide companies have specifically mentioned that environmental protection and production restrictions have an impact on their annual results. For example, Annada has limited production of titanium dioxide production lines by 30% from October 1st to December 31st 2017. It is expected that the planned production of titanium dioxide in the fourth quarter will be 4,000 tons and profits will be reduced by about 10 million yuan. Long Kuangli said that from September 19 to October 31, 2017, the company's temporary production restriction limit was more than 30%. At present, it has not yet measured the profit to affect the specific amount.