On the evening of March 28, Pangang Vanadium and Titanium (3.75 -0.27%, diagnostic stock) released its 2021 annual report, the company’s annual operating income in 2021 was 14.06 billion yuan, a year-on-year increase of 33.42% (after adjustment), attributable to shareholders of listed companies net profit of 1.328 billion yuan, a year-on-year increase of 248.56% (after adjustment); the deducted non-net profit attributable to shareholders of the listed company was 1.001 billion yuan, a year-on-year increase of 367.67% (after adjustment). The company’s operating income and net profit attributable to the parent have achieved substantial growth.
For the reasons for the growth in performance, Pangang Vanadium and Titanium said that it was mainly due to the increase in sales revenue. During the reporting period, the main businesses of Pangang Vanadium and Titanium include vanadium, titanium and electricity, among which vanadium and titanium are the strategic key development businesses of the company. The company is one of the largest vanadium producers in China and also has an important position in the domestic titanium field.
The annual report shows that vanadium products are mainly used in the steel industry, which is affected by the periodicity of the steel industry to a certain extent. In 2021, the global crude steel output was 1.951 billion tons, a year-on-year increase of 3.7%. The increase in crude steel output has also led to an increase in the demand for vanadium products. In 2021, with the commissioning of some domestic vanadium enterprises, the production capacity and output of the vanadium industry further increase, and the output of vanadium raw materials, ferrovanadium and vanadium-nitrogen alloys all rebound. The total domestic output was about 136,000 tons, an increase of about 7% over 2020.
Volume: In 2021, the sales volume of vanadium products, titanium dioxide and titanium slag increased by 0.77%, 4.03% and 6.12% respectively. By fully releasing production capacity, the company achieved positive growth in production and sales of major products. The company’s sales of vanadium products in 2021 was 42,600 tons (including Xichang vanadium products), a year-on-year increase of 0.77%; the sales of titanium dioxide was 247,400 tons, a year-on-year increase of 4.03%; the sales of titanium slag was 213,600 tons, a year-on-year increase of 6.12%.
Price: The price of titanium products increased significantly, and the gross profit margin increased to 19.92%. In 2021, the prices of vanadium pentoxide, titanium dioxide and titanium acid slag increased by 18.6%, 40.5% and 42.83% respectively. At the same time, the company’s raw materials are mainly from the parent company, and the cost source is stable. It is estimated that the unit cost of vanadium products declined by 3.47% (Xichang vanadium products). The unit cost of titanium dioxide and titanium slag increased by 21.99% and 35.13% respectively. In 2021, the company’s vanadium products and titanium products’ gross profit margins increased to 30.35% and 17.74% respectively. The company’s overall gross profit margin level increased by 8.28pct to 19.92%.
Future Core Aspects:
Successfully acquired Xichang vanadium products + signed a strategic agreement with Sichuan Desheng Group, the company’s leading position in vanadium products will be more stable. In 2021, the company successfully completed the acquisition of Xichang vanadium products (18,000 tons of vanadium products production capacity), and the existing vanadium products production capacity reached 40,000 tons (in terms of V2O5), and the production capacity scale is in the forefront of the world. In addition, the company signed a cooperation framework agreement with Sichuan Desheng, and the two parties plan to set up a joint venture company to invest in the construction of a V2O5 vanadium slag processing production line with a production capacity of 20,000 tons.
Vanadium batteries have broad development prospects and are expected to become an important growth point for the company’s future performance. In 2021, the company signed a cooperation agreement with Dalian Borong and its related subsidiaries and joint-stock companies to process the company’s ammonium polyvanadate raw materials into vanadium energy storage medium, which will be fully used in the “national demonstration project (phase I) of Dalian flow battery energy storage and peak shaving power station” project of constant current company (Dalian Borong joint-stock company). The company’s vanadium battery has broad development prospects and is expected to become an important performance growth point in the future.
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