China Nuclear Titanium Dioxide: plans to raise no more than 7.1 billion yuan to enter the iron phosphate industry

On May 25, 2021, China Nuclear Titanium Dioxide issued an announcement on the implementation plan for additional issuance.
The total amount of funds raised by the company in this issuance does not exceed 7.
09 billion yuan, the number of issued shares does not exceed 616 million shares (including 616 million shares), and the upper limit of the number of non-public offerings No more than 30% of the company's total share capital before the issuance, all subscribed in cash by the issuers.
The funds raised this time are mainly used to expand the production capacity of titanium dioxide and construct iron phosphate projects.


Benefiting from the continued increase in the price of titanium dioxide, the company's performance is on the rise.
The financial report for the first quarter showed that the company achieved operating income of 1.
236 billion yuan, a year-on-year increase of 49.
53%; net profit attributable to parent companies was 287 million yuan, a year-on-year increase of 77.
29%, compared with the first quarter of 2019, an increase of 51.
10% and 165.
74% respectively.
Since the beginning of this year, China Nuclear Titanium Dioxide share price has risen by 133.
33%.


Raising funds of no more than 7.
09 billion yuan cross-boundary to enter the field of iron phosphate

On May 25, 2021, the company issued the "2021 Non-public Issuance of A Shares Preplan".
According to the announcement, the target of this non-public offering is no more than 35 specific investors, and the number of shares to be issued does not exceed 616,000,000 shares (including 616,000,000 shares).
The shares subscribed by the issuance target will be listed since the end of the issuance.
It cannot be transferred within six months from the date on which it is issued.


The total amount of the company’s raised funds does not exceed 7091.
0 million yuan (including the amount).
After deducting the issuance costs, all the net raised funds will be invested in the following projects:


In addition to supplementary working capital, the company’s raised funds are mainly used to invest in the construction of recycled titanium dioxide deep processing projects, Water-soluble monoammonium phosphate (water-soluble fertilizer) resource recycling project, project with an annual output of 500,000 tons of iron phosphate.


The most concerned project of this fundraising project is the iron phosphate project with an annual output of 500,000 tons, which uses the by-products (waste acid, acid wastewater, ferrous sulfate) in the production of titanium dioxide as raw materials for the production of lithium iron phosphate.
The products of this project are mainly used in new energy power vehicles, energy storage and other fields.
Among them, the largest and most used is the new energy vehicle industry.
The plan shows that the project plans to invest 3.
83 billion yuan, and the overall construction period is 36 months, including the first phase of 100,000 tons/year iron phosphate construction period of 24 months, and the second phase of 400,000 tons/year iron phosphate construction period of 36 months.


It is worth noting that the company received a letter of concern from the Shenzhen Stock Exchange regarding this investment proposal in February 2021.
According to the statistics of the China Battery Industry Association, the output of China's lithium battery lithium iron phosphate material in 2020 is only 143,000 tons.
The project is expected to produce more than three times the current output in the country.
The Shenzhen Stock Exchange requires the company to explain the feasibility of entering the field of lithium iron phosphate.
.
In response, China Nuclear Titanium Dioxide replied that the total capacity design for an annual output of 500,000 tons of lithium iron phosphate is mainly based on the established and proposed crude titanium dioxide production capacity of subsidiary Dongfang Titanium.
The construction of the second and third phases of the company's projects will be implemented cautiously in accordance with the construction and commissioning of Oriental Titanium's annual production of 200,000 tons of crude titanium dioxide, the actual capacity and demand of the lithium iron phosphate market.


Titanium dioxide meets the rising price tide and raises funds to expand its production capacity

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China Nuclear Titanium Dioxide is mainly engaged in the production and sales of titanium dioxide and other products.
The main products are titanium dioxide series products.
The financial report shows that China Nuclear Titanium Dioxide will realize operating income and net profit of 3.
716 billion yuan and 475 million yuan respectively in 2020, an increase of 10.
03% and 10.
27% respectively year-on-year.



The company's performance is greatly affected by the price of titanium dioxide.
Affected by factors such as rising prices of raw materials such as titanium concentrates and strong domestic and foreign demand, since July 2020, the price of titanium dioxide has rebounded from the bottom, showing a continuous upward trend.
WIND data shows that as of May 24, 2021, the domestic spot price of titanium dioxide (rutile type) reached 20,400 yuan/ton, an increase of 52.
34% year-on-year, and the market price was also a historical high in the past five years.


In addition, with the commissioning of a comprehensive utilization project of 100,000 tons of rutile-type titanium dioxide resources per year by subsidiary Oriental Titanium, the company's production capacity has ceased to expand, and the production and sales of its main product titanium dioxide have both increased year-on-year.
The annual report shows that the company will achieve 317,600 tons of finished titanium dioxide in 2020, an increase of 24.
23% year-on-year; sales of finished titanium dioxide of 319,900 tons, an increase of 26.
96% year-on-year; titanium dioxide business achieved revenue of 3.
692 billion yuan, an increase of 10.
94% year-on-year.
It is worth noting that the company's titanium dioxide gross profit margin was 26.
59%, down 5.
17 percentage points year-on-year.


Benefiting from the increase in the volume and price of its main products during the reporting period, CNNC's titanium dioxide performance continued to rise in the first quarter of this year.
As of March 31, 2021, the company achieved operating income of 1.
236 billion yuan, a year-on-year increase of 49.
53%; net profit attributable to parent companies was 287 million yuan, a year-on-year increase of 77.
29%, compared with the first quarter of 2019, an increase of 51.
10% and 165.
74% respectively.



In the context of the industry's high boom, the China Nuclear Power Titanium Dioxide expansion proposal has been put on the agenda.
The annual report shows that the company's current production capacity of titanium dioxide is 400,000 tons (including 100,000 tons under construction), and the capacity utilization rate is 79.
39%.
According to the previous proposal, the company's recycled titanium dioxide deep processing project will increase its annual output by 300,000 tons.