Dongwu Securities: First Coverage of Tiangong Holdings with Overweight Rating

Soochow Securities Co., Ltd. Zhu Jieyu, Yi Shenshen, Yu Huiyong, Wu Alang, and Chen Zhexiao recently conducted research on Tiangong Co., Ltd. and published the research report “Small Giant in the Titanium Industry, Spring Breeze in Consumer Electronics,” initiating coverage with an “Overweight” rating.

Tiangong Co., Ltd. (Stock code: 920068)

Investment Highlights

Specialized Manufacturer of Titanium and Titanium Alloy Products: The company produces plates, pipes, wires, and other products widely used in chemical industry, consumer electronics, 3D printing, medical devices, and more. It is a national-level “Little Giant” enterprise recognized for specialized, refined, distinctive, and innovative development, as well as a high-tech enterprise. The company owns a provincial enterprise technology center, Jiangsu Titanium and Titanium Alloy New Materials Engineering Technology Research Center, and Jiangsu Graduate Workstation. As of December 31, 2024, it has obtained 51 patents, including 14 invention patents. From 2022 to 2024, revenue was 383 million yuan, 1.035 billion yuan, and 800 million yuan, respectively, with net profits attributable to parent company of 70 million yuan, 170 million yuan, and 172 million yuan. In 2024, wire sales accounted for over 50%, becoming the core revenue source. As of June 30, 2025, the company’s controlling shareholder, Jiangsu Tiangong Investment Management Co., Ltd., held a 67.63% stake, with a concentrated and stable ownership structure.

Leading the Future of High-End Global Titanium Industry: Due to excellent properties such as high-temperature resistance and corrosion resistance, titanium and titanium alloys are widely used in chemical industry (accounting for 51.23% of demand in 2023), aerospace, consumer electronics, 3D printing, biomedical fields, and more. In recent years, global titanium raw material production has been affected by the pandemic and other factors. China’s titanium industry has achieved countercyclical growth through proactive measures. From 2015 to 2023, titanium processed material output increased from 48,600 tons to 159,100 tons, and sales volume from 43,700 tons to 148,400 tons, with compound annual growth rates of 15.97% and 16.51%, respectively. However, the industry pattern is characterized by exports mainly low-end titanium products and imports mainly high-end titanium products. Since high-end titanium production relies on high-quality rutile titanium ore, which is scarce in China, industry companies are controlling upstream resources through strategic alliances, mergers and acquisitions, and are expanding globally via the “Belt and Road” initiative to ensure supply chain security and enhance international competitiveness.

Specialized Titanium Production Processes, Precise Customer Targeting:

1. Product Innovation Rooted in Consumer Electronics, Process Innovation Enables High-Quality and Efficient Production: The company focuses on consumer electronics for product innovation, with main wire products outperforming domestic and international peers, and expanding into innovative products for additive manufacturing, aerospace, and other fields. It has achieved multiple breakthroughs in processes, mastering core technologies such as purification melting of titanium and titanium alloys, large-diameter wire production, high-strength TC18 titanium alloy preparation, Ti-4Al-22V wire production, and TRIP effect low-temperature solution strengthening, improving overall production efficiency and product quality.

2. Integrated Full-Process Production to Support Stable and Efficient Manufacturing: The company has established a complete titanium production system from sponge titanium to finished products, creating barriers in fields like consumer electronics.

3. Fundraising Overview: Strategic Sustainable Development: CNY 360 million of the raised funds will be used to build an annual 3,000-ton high-end titanium and titanium alloy rod and wire production line.

Profit Forecast and Investment Rating: We expect Tiangong Co. to achieve revenues of CNY 631 million, 975 million, and 1.273 billion in 2025-2027, with net profits attributable to parent of CNY 140 million, 218 million, and 284 million, respectively. Based on the closing price on March 16, 2026, the PE ratios for 2025-2027 are estimated at 105.28x, 67.61x, and 52.01x. As a high-growth, innovative leader in the industry, the company will benefit from increased titanium application in consumer electronics. We initiate coverage with an “Overweight” rating.

Risk Factors: Dependence on major customers and substitution risks, raw material price fluctuations, overcapacity, intensified market competition, implementation risks of fundraising projects, product application risks, etc.

The above content is compiled from publicly available information by Securities Star, generated by AI algorithms (Network Credit Record 310104345710301240019), and does not constitute investment advice.