CCM: Analysis on China and Global Giant TiO2 Enterprises in Q3 2016

Guangzhou, China, December 2, 2016 (Newswire.com) - ​The downturn TiO2 market in 2015 didn’t last long and the year of 2016 belonged to TiO2 industry. With the suspended production of some TiO2 enterprises in China and the globe, the supply and demand changed gradually and the TiO2 price finally rebounded in China.

Since the beginning of 2016, the TiO2 quotation was raised continuously over ten times in China, with the average price increasing by USD663.97/t and the growth of nearly 50% compared to that in Jan. 2016, according to the news in CCM Online Platform.​

Under such a beneficial circumstance, analyst CCM believed that the performances of TiO2 enterprises are better off step by step. With the Q3 financial reports of TiO2 enterprises in China and aboard being released, analyst CCM observed three trends in the TiO2 market.

Performance of China TiO2 enterprises in Q1-Q3 2016

Henan Billions Chemicals Co., Ltd. (Henan Billions)

Revenue in Q1-Q3 2016 (RMB100 million): 20.32

YoY change on revenue: 6.69%

Net profit (RMB10 million): 11500

YoY change on net profit: 106.82%

CNNC Hua Yuan Titanium Dioxide Co., Ltd. (CNNC TD)

Revenue in Q1-Q3 2016 (RMB100 million):14.6

YoY change on revenue: 17.97%

Net profit (RMB10 million): 4643.2

YoY change on net profit: 437.56%

Jilin GPRO Titanium Industry Co., Ltd. (Jilin GPRO)

Revenue in Q1-Q3 2016 (RMB100 million): 6.08

YoY change on revenue: 9.1%

Net profit (RMB10 million): 4839

YoY change on net profit: -48.84%

Anhui Annada Titanium Industry Co., Ltd. (Anhui Annada)

Revenue in Q1-Q3 2016 (RMB100 million): 5.76

YoY change on revenue: 23.03%

Net profit (RMB10 million): 1905

YoY change on net profit: 130.58%

Source: financial reports of listed companies and CCM Online Platform

Revenues of China TiO2 enterprises increases in general

China listed TiO2 enterprises all increased in their revenues, with the growth of 5%-25% in Q1-Q3 2016, which was a reflection of the positive effects on TiO2 enterprises from the increasing price of TiO2 in China. Based on CCM’s observation, the revenue growth of TiO2 enterprises matched the growth of TiO2 prices basically in China.

Among all the listed TiO2 enterprises, Anhui Annada performed the best in the revenue in Q1-Q3 2016, with the growth up 23.03% YoY. As for the China TiO2 giant Henan Billions, its revenue was up 6.96% YoY in Q1 - Q3 2016. However, regarding to the total revenue of these two enterprises, the total revenue of Henan Billions in Q1-Q3 2016 was RMB2.032 billion while that of Anhui Annada was only RMB576 million Q1-Q3 2016.

Tan Ruiqing, vice-president of Henan Billions, stated that if the TiO2 price remained at USD2,213.23/t in 2017, it is very likely that the net profit will double in 2017 in Henan Billions.

Moreover, Jilin GPRO’s revenue reached RMB608 million in Q1-Q3 2016, up 9.1% YoY and the revenue in CNNC TD was RMB1.46 billion in Q1-Q3 2016, up 17.97% YoY.

Difference performances in net profits

Though the revenue of the listed TiO2 enterprises increased overall, the performance of net profit of each enterprise was quite different from each other.

CNNC TD’s net profit attributable to shareholders was RMB46.432 million in Q1-Q3 2016, up 437.56% YoY, with earning of RMB0.0291 per share. Henan Billions performed well as always, with the net profit attributable to shareholders of RMB119 million in Q1-Q3 2016, up 103.65% YoY. Anhui Annada was good as well, with the net profit attributable to shareholders of RMB19.05 million in Q1-Q3 2016, up 130.58% YoY. However, due to the operational issues in Jilin GPRO, its net profit attributable to shareholders was RMB48.69 million in Q1-Q3 2016, down 48.84% YoY.

Weak increase in foreign TiO2 enterprises

Compared to the good performance of TiO2 enterprises in China, the foreign TiO2 enterprises remained tepid in their performance.

Performance of China TiO2 enterprises in Q1-Q3 2016

The Chemours Company  (Chemours)

Revenue in Q3 2016 (USD): 625 million

YoY change on revenue: 1.5%

Net profit (USD): 144 million

YoY change on net profit: 80%

Huntsman International LLC. (Huntsman)

Revenue in Q3 2016 (USD): 2.363 billion

YoY change on revenue: -10%

Net profit (USD): 272 million

YoY change on net profit: -10%

Source: financial reports of listed companies and CCM Online Platform

Chemours increased stable in its revenue. According to its Q3 financial report, Chemours’s revenue reached USD625 million, up 1.5% YoY. The sales value of its TiO2 business in Q3 2016 accounted for 44.7% of the total sales value in Chemous. In Q3, its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) reached USD144 million, up 80% YoY.

As for Huntsman, its sales value was USD2.363 billion in Q3 2016, down 10% YoY, with the EBITDA of USD272 million, down 10% YoY.

On the contrary, Kronos was super good in its performance. Compared to its deficits in Q3 2015, its net profit of TiO2 business reached USD31 million, making its accumulative net profits of TiO2 business reach USD48.2 million in Q1-Q3 2016, up 65% YoY.

All in all, the TiO2 enterprises were on upward trends in their performance. Under the upward trend of TiO2 market currently, the TiO2 enterprises should follow the trends to make the best profits.

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Source: CCM