Anhui Sierte Fertilizer Industry Ltd.Company(002538) (002538)
Core view
The single quarter profit continued to maintain a high level: Anhui Sierte Fertilizer Industry Ltd.Company(002538) released the announcement of the third quarterly report. In 2021q3, the company achieved a revenue of RMB 3.309 billion, almost the same as that in the same period last year, and realized a net profit attributable to the parent company of RMB 387 million, a year-on-year increase of + 92.4%. In 2021q3, the single quarter revenue was RMB 1.158 billion, a year-on-year increase of - 14.4%, a month-on-month increase of - 16.3%, and a net profit attributable to the parent company of RMB 135 million, a year-on-year increase of + 100.5%, a month-on, The high outlook of the fertilizer industry continues to support the company's single quarter profit at a historically high level.
The boom of products and raw materials has been adjusted at a high level, and the integration has helped the company grow steadily: the price of monoammonium phosphate in China has increased from 1835 yuan / ton at the beginning of October 20 to 3550 yuan / ton in mid August this year, with an increase of 93%. Although the price of Monoammonium has gradually fallen due to the subsequent price adjustment of raw materials, it is still at a historical high level of about 3000 yuan / ton. The integrated supporting advantages of the company are obvious. In the first three quarters, the gross profit margin was 27.45%, with a year-on-year increase of 9.8pct, and the net profit margin was 11.60%, with a year-on-year increase of 5.47pct, fully benefiting from the profit thickening brought by the upward boom of the industry. We believe that the decline in the growth rate of Q3 performance is mainly due to seasonal factors and the positive delivery of enterprises due to the rise in prices in the early stage, so it slows down slightly; However, the integrated supporting advantages of the company are gradually improved, and still resist the continuous and significant upward pressure of raw materials.
Relying on resource advantages to enter the new energy materials track: the company announced in September that it plans to cooperate with Rongjie group and AVIC trust to develop phosphate rock resources and invest in the production capacity of lithium iron phosphate and iron phosphate. On the one hand, the company plans to transfer part of the equity of Guizhou lufa phosphate mine to Rongjie group and jointly develop and mine it; On the other hand, it is proposed to jointly invest 2 billion and 1.5 billion respectively to build 50000 tons of lithium iron phosphate and 100000 tons of iron phosphate capacity. Rongjie's technology and channel capabilities, combined with the company's own supporting resources, will provide guarantee for the implementation and profitability of future projects.
Financial forecast and investment suggestions
Based on the principle of prudence and objectivity, the contribution of new energy materials will not be considered for the time being. Due to the significant rise in the prices of compound fertilizer and monoammonium phosphate this year, the company's product prices and profitability have been significantly improved, Therefore, we raised the product price and predicted that the net profit attributable to the parent company in 21-23 years would be RMB 515 / 537 / 596 million respectively (the original forecast was RMB 323 / 403 million in 21-22 years). According to the average p / E ratio of 21 times that of the comparable company in 21 years, we gave the target price of RMB 12.6 (the original target price of RMB 7.20) and maintained the buy rating.
Risk statement
The product boom is less than expected, and the price fluctuation risk of raw materials.
