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In the first half of this year, affected by unfavorable factors such as rising raw material prices and weak volume and price trends in the downstream sector, the net profits of domestic listed titanium dioxide companies generally declined. According to data from East Money, in the first half of this year, among the 12 listed titanium dioxide companies, only 4 managed to achieve growth in both revenue and net profit. Meanwhile, net profits declined at 8 companies, accounting for 67% of the total. Amid the downward trend in performance, titanium dioxide manufacturers have accelerated their efforts to enter the field of new energy batteries. In fact, since the second half of 2020, the titanium dioxide industry has seen a surge in expansion efforts related to new energy battery materials. Many companies in this sector have entered the field of new energy batteries, producing materials such as iron phosphate and lithium iron phosphate in order to develop a \"second growth curve\" for their business. Nearly 70% of companies saw a decline in net profits; 6 companies managed to increase revenue but not profits. Among the 12 listed titanium dioxide companies, 8 experienced a decrease in net profits during the first half of the year. Among them, 6 companies, including CNNC Titanium Dioxide and Jinpu Titanium Industry, managed to boost their revenue without seeing any corresponding increase in profits. Taking China National Titanium White and Jinpu Titanium Industry as examples, China National Titanium White’s semi-annual report shows that the company achieved operating revenue of 2.875 billion yuan in the first half of the year, a year-on-year increase of 10.15% ； The net profit attributable to the shareholders of the listed company was 537 million yuan, a decrease of 18.23% on a year-on-year basis. Jinpu Titanium’s semi-annual report shows that the company achieved operating revenue of 1.375 billion yuan in the first half of the year, a year-on-year increase of 11.02% ； The net profit attributable to the shareholders of the listed company was 42 million yuan, a decrease of 62.69% on a year-on-year basis. Zhang Xiaorong, director of the Deep Technology Research Institute, said, “In the first quarter of this year, due to rising raw material prices, titanium dioxide prices increased supported by costs.” In the second quarter, the titanium dioxide market showed a downward trend. From April to May, due to localized outbreaks of the pandemic, some titanium dioxide producers cut production or even halted operations. In June, the industry entered its off-season, with weakened demand from downstream markets. As a result, titanium dioxide prices continued to decline, and many companies experienced increased revenue without a corresponding rise in profits. ” In terms of raw materials, the average price of 46% titanium concentrate in the Panxi region during the first half of this year was 2,304 yuan per ton, representing a 3.2% increase on a year-on-year basis ； The average price of sulfuric acid was 758 yuan per ton, up 91.38% year-on-year ； The average price of petroleum coke was 4,534 yuan per ton, a year-on-year increase of 100.4%. In addition to rising raw material costs, weak demand and prices in the downstream market are also the main factors contributing to the declining performance of related companies. Data shows that since June this year, domestic titanium dioxide prices have seen a significant downward trend, with the decline amounting to approximately 5,000 yuan per ton. As we enter the traditional peak season of \"Golden September,\" the price of titanium dioxide continued to fall. The average price at the beginning of September was 16,352 yuan per ton, a decrease of 7.38% compared to the beginning of August. Zhang Xiaorong also believes that \"due to the sluggish performance of the real estate sector downstream, demand for titanium dioxide is under significant pressure; it is difficult for prices to rise, and they are likely to continue falling.\" ”Focusing on cross-sector entry into the new energy sector to create a second growth curve: Against the backdrop of overall declining performance in the industry, several titanium dioxide manufacturers are accelerating their efforts to develop materials for new energy batteries. Recently, China National Titanium White issued a statement stating that its application for private placement of A-share stocks has been approved by the China Securities Regulatory Commission. Specifically, the company plans to raise no more than 7.091 billion yuan through a private placement, which will be used primarily for the advanced processing project of recycled titanium dioxide, the resource recycling project for water-soluble monoammonium phosphate, the project to produce 500,000 tons of lithium iron phosphate per year, and to supplement working capital. Of this amount, 3.385 billion yuan will be used for the project to produce 500,000 tons of iron phosphate per year. At present, CNNC Titanium Dioxide has commenced construction of the first phase of its project, which will have a production capacity of 100,000 tons of ferric phosphate. In addition to China Nuclear Titanium Dioxide, Huiyun Titanium Industry and Jinpu Titanium Industry also announced their entry into the new energy battery sector during the first half of the year. In June this year, Huiyun Titanium Industry issued a statement saying that it is leading the effort to invest 10 billion yuan in building a new energy materials industrial park in Yun’an District, Yunfu City ； On March 28, Jinpu Titanium Industry announced that it plans to invest 10 billion yuan in an integrated project involving new energy battery materials such as lithium iron phosphate. In fact, the lithium iron phosphate market has remained robust in recent years. Driven by advantages in the industrial chain and substantial profits, the titanium dioxide industry witnessed a surge in expansion of lithium iron phosphate production capacity starting in the second half of 2020. According to incomplete statistics by reporters, as of now, 8 titanium dioxide manufacturers listed on the stock market have expanded into the field of lithium iron phosphate materials. There are also titanium dioxide manufacturers that have already reaped benefits from the booming market for new energy batteries. According to Annada’s semi-annual report, the company achieved operating revenue of 1.355 billion yuan in the first half of the year, a year-on-year increase of 48.86% ； The net profit attributable to shareholders of the listed company was 128 million yuan, a year-on-year increase of 48.52%. Anada said that in the first half of this year, its subsidiary Tongling Nayuan increased its production capacity to boost equipment manufacturing output; demand for its products exceeded supply, resulting in significant year-on-year increases in the production volume of iron phosphate, as well as in sales, main business revenue, and profits. The production volume of iron phosphate increased by 92.12%, while sales volume rose by 98.3%. The main business revenue grew by 368 million yuan compared to the same period last year, representing a rise of 288.77%. The net profit attributable to listed companies saw an increase of 588.24%. In addition, Longbai Group’s production lines for lithium-ion new energy materials such as iron phosphate, lithium iron phosphate, and graphite anodes were put into operation in the first half of the year. The current production capacity is 50,000 tons for iron phosphate, 50,000 tons for lithium iron phosphate, and 25,000 tons for graphite anodes. An additional 50,000 tons per year of graphitization capacity is expected to be added by the end of the third quarter this year, while an additional 50,000 tons per year of capacity for ferrophosphic acid will be added by the end of the fourth quarter. The company’s ongoing new energy material projects will be fully operational by 2023, at which time it will have a production capacity of 350,000 tons for iron phosphate, 350,000 tons for lithium iron phosphate, and 300,000 tons for graphite anodes. Researchers at the institute said, “New energy batteries are on the rise. Various ‘new players’ and ‘established players’ are increasing their investments, leading to a rapid expansion of industry supply and scale, as well as swift growth in industry consumption.” ” A research report by Founder Securities predicts that the demand for lithium iron phosphate could exceed 2 million tons by 2025. Given the increasing share of power generation from new energy sources such as wind and solar, along with the growing demand for energy storage solutions, under optimistic scenarios, the annual demand for lithium iron phosphate could reach 10 million tons by around 2030.