Longbai Group Goes to Hong Kong for IPO to Promote A+H Dual Financing Layout, New Energy Battery Plans 5 Years to Over 50 Billion Revenue

Longbai Group may become another A+H listed company
.

Recently, as the leading bidder in the global titanium dioxide industry, Long Bai Group (002601.
SZ) submitted a prospectus on the Hong Kong Stock Exchange and plans to issue H shares on the Hong Kong Main Board
.

The company plans to raise 1 billion to 1.
5 billion US dollars (equivalent to 7.
8 billion to 11.
7 billion Hong Kong dollars).
CICC, CMB International, Guotai Junan (18.
590, 0.
76, 4.
26%) and GF Capital are joint sponsors
.
If it is successfully listed on the Hong Kong Stock Exchange this time, Longbai Group will realize the A+H layout
.

A reporter from the Yangtze River Commercial Daily noticed that since 2017, after breaking through the 10 billion yuan mark in revenue for the first time, Longbai Group has always maintained a good momentum of stable growth
.
The 2021 semi-annual report shows that the company achieved operating income of 9.
838 billion yuan in the first half of the year, an increase of 55.
53% over the same period of the previous year; realized total profits of 2.
856 billion yuan, an increase of 82.
76% over the same period last year; realized net profit attributable to shareholders of listed companies of 2.
435 billion yuan , An increase of 88.
33% over the same period last year
.

As a technology-based enterprise, Longbai Group attaches great importance to R&D investment, and technology has become its core competitiveness
.
Data show that as of the three years from 2018 to 2020 and the six months ended June 30, 2021, the company incurred R&D expenditures of 399 million yuan, 416 million yuan, 529 million yuan, and 414 million yuan, respectively
.

In recent years, Longbai Group has actively deployed the new energy battery sector, forming an integrated operation and management model centered on the group headquarters and seven production bases, covering vertical extensions from mining, titanium dioxide, and titanium to zirconium products, scandium products, Seven sectors for the horizontal expansion of smart equipment manufacturing and new energy battery materials
.

Endogenous and external extensions promote steady growth in performance
As early as April this year, Longbai Group disclosed its plan to go public in Hong Kong
.
Longbai Group announced on April 29 that in order to further improve the company’s capital strength and international influence, in accordance with the company’s development strategy and business needs, the company plans to issue overseas listed foreign shares (H shares) and list them on the Hong Kong Stock Exchange.
The company's board of directors authorized the company's management to start the preparatory work for the H-share listing
.

The headquarter of Longbai Group is located in the western industrial agglomeration area of ​​Jiaozuo, Henan.
It is a large-scale inorganic fine chemical group.
It is mainly engaged in the production and sales of titanium dioxide, titanium sponge, zirconium products and sulfuric acid.
It is the largest titanium dioxide enterprise in Asia
.
It went on the market in July 2011, and was renamed from "Lemon Baili" on July 7, 2021
.

Since its listing, Longbai Group has adhered to the two-wheel-driven development model of M&A expansion and endogenous growth.
In 2016, it acquired Sichuan Longman Titanium Industry Co.
, Ltd.
, in 2019, it acquired Yunnan Metallurgical Xinli Titanium Industry Co.
, Ltd.
, and established a holding subsidiary in 2020.
Gansu Detong Guo Titanium Metal Co.
, Ltd.
also bid for the assets of Jinchuan Group Co.
, Ltd.
Titanium Plant, forming an operation and management model centered on the group headquarters and coordinated with seven production bases
.

The data shows that in 2016 and 2017, Longbai Group’s operating income was 4.
184 billion yuan and 10.
353 billion yuan, a year-on-year increase of 57.
30% and 147.
45% respectively; net profit was 442 million yuan and 2.
502 billion yuan, a year-on-year increase of 296.
74% respectively.
And 466.
02%
.

Since then, the performance of Longbai Group has remained basically stable.
From 2018 to the first half of 2021, Longbai Group achieved operating income of 10.
554 billion, 11.
420 billion, 13.
960 billion, and 9.
863 billion respectively, and the corresponding net profit was 2.
247 billion and 2.
617 billion respectively.
, 2.
34 billion and 2.
468 billion
.
In addition, the gross profit margin was 38.
2%, 39.
9%, 35.
1%, and 40.
3%, respectively
.

2021 is the first year of the "14th Five-Year Plan".
The company has made overall plans for the next five years: the planned production of titanium dioxide will exceed 1.
5 million tons/year, and the production of titanium sponge and titanium alloy will be 80,000-100,000 tons/year.
, Intelligent manufacturing, circular economy and other diversified fields have made breakthroughs
.
It is predicted that by the end of the "14th Five-Year Plan", the company's total assets will reach 50 billion yuan, operating income will reach 50 billion yuan, and profits and taxes will exceed 15 billion yuan
.

In the first half of 2021, the company achieved an output of 434,000 tons of titanium dioxide and a sales volume of 425,000 tons
.

According to Frost & Sullivan data, Longbai Group is the third largest titanium dioxide producer in the world and the largest titanium dioxide producer in Asia and China in terms of output, sales volume and production capacity in 2020
.
For the year ended December 31, 2020, in terms of production volume, it accounted for 11.
4% of the global market share and 23.
4% of the Chinese market share, while in terms of sales volume, it accounted for 11.
7% of the global market share and 24.
0% of the Chinese market share
.

Actively lay out the new energy battery sector
"The company has been making technical preparations for the production of lithium iron phosphate materials in recent years.
The establishment of Longbai New Materials is mainly intended to extend the titanium dioxide industry chain and use waste to produce new energy battery materials, namely Lithium iron phosphate
.
" Lomon Baili related person in charge revealed
.

Longbai Group established its subsidiary Baili New Energy as early as the end of last year to release the signal to enter the new energy field
.
In early 2021, the Group Bai Long came the latest news into lithium iron phosphate market, its subsidiary New Energy Billions to be invested 300 million yuan set up Henan Bai Long New Material Technology Co.
, Ltd
.

The second half of the year was even more frequent.
On July 25, the company announced that it plans to establish a joint venture with Hubei Wanrun New Energy Technology Co.
, Ltd.
in Nanzhang County, Hubei Province to build a 100,000-ton iron phosphate project; Two announcements were made.
One said that it plans to invest in the construction of a 30,000-ton/year rotor-grade titanium sponge technology upgrading and transformation project, with a total project investment of 1.
8 billion yuan; the other said that it agreed to fully invest in the construction of a 7 million-ton green and high-efficiency beneficiation project , The total investment of the project reached 600 million yuan; on August 12, the company announced that it plans to invest in three new energy projects: an annual output of 200,000 tons of battery material grade iron phosphate project, an annual output of 200,000 tons of lithium ion battery material industrialization project, Project with an annual output of 100,000 tons of artificial graphite anode materials for lithium-ion batteries
.

Guojin Securities (11.
500, 0.
08, 0.
70%) analyzed that with the vigorous promotion of new energy vehicles, it is expected that the growth rate of demand for lithium battery materials will continue to accelerate in the future
.
Longbai Group uses titanium dioxide by-product ferrous sulfate, hydrogen, caustic soda, hydrogen peroxide, etc.
as raw materials to produce lithium iron phosphate materials, which will further leverage the company's integrated industrial chain advantages.