\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 93 Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) )
Recently, the international price of potash fertilizer has risen rapidly. According to wind data, as of March 15, 2022, the FOB prices of potassium chloride in Vancouver, northwest Europe and Israel were $691.5, 761.5 and 789 / ton respectively, an increase of $97.5, 131.5 and 132.5 / ton respectively, or 16.4%, 20.9% and 20.2% respectively compared with March 3. In terms of import regions, according to the data of Baichuan Yingfu, the CFR market prices in Brazil and Southeast Asia were reported at US $950 and US $760 / ton respectively, an increase of US $180 and US $70 / ton respectively compared with March 3, with an increase of 23.4% and 11.7% respectively. The international price of potassium chloride ended the early shock and entered the stage of rapid rise.
The rise in international potash prices is mainly due to the severe impact on the supply side. First, the sanctions imposed on Belarus led to a 21% reduction in global potash exports. In the second half of 2021, Europe and the United States jointly sanctioned the Belarus potash industry; In January 2022, Lithuania announced the termination of the potash transport agreement between the state railway and Belarus; In February 2022, Belarus potash announced that it was unable to continue to perform the contract due to force majeure; At present, the export of potash fertilizer from Belarus has not yet determined a suitable alternative, and the export of potash fertilizer is limited. Secondly, the Russian Ukrainian war exacerbated the shortage of potash supply. Russia's potash exports account for 19% of global exports. On March 10, the Russian Ministry of industry announced the temporary suspension of fertilizer exports. Although Putin said he would guarantee the fertilizer exports of friendly countries, it still exacerbated the market panic. Meanwhile, the United States and the European Union announced that some Russian banks would be removed from the swift system, and Russia's import and export trade might be affected, thereby affecting the export of potash fertilizer. As a result of the above events, 40% of the world's potash fertilizer exports are limited, there is a huge gap in potash fertilizer supply, and the international price of potash fertilizer is rising rapidly.
Under multiple factors, the price center of potash fertilizer moved upward and the boom time lengthened. Due to the large reduction in the export of potash fertilizer from Belarus and Russia, it is difficult to make up for the supply gap in the short term. At the same time, the downstream Shenzhen Agricultural Products Group Co.Ltd(000061) price is high, farmers' planting enthusiasm is improved, and the demand for potassium fertilizer continues to increase. Therefore, the boom time of potash fertilizer is expected to be prolonged and the price center will move up, which is conducive to improving the profitability of potash fertilizer enterprises.
Under the rising price, the company's performance is expected to improve rapidly Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) production base is located in Laos, and potassium fertilizer products are mainly sold to Southeast Asian markets. The Southeast Asian market is highly dependent on imports and is greatly affected by international prices. Therefore, the selling price of the company's products is expected to increase. In 2022, the company expanded its production capacity from 250000 tons to 1 million tons, and now it has reached 80%; It is planned to expand production to 3 million tons in the next 3-5 years. Therefore, under the "simultaneous rise in volume and price", the company's performance is expected to improve in an all-round way.
Investment advice
Based on the above factors, we raised the company's profit forecast. It is expected that the company's EPS in 2021, 2022 and 2023 will be 1.12/2.65/2.76 yuan respectively, and the corresponding PE will be 23.18/9.81/9.40 yuan respectively. In combination with the upward trend of the industry boom and the release of the company's future production capacity, we are optimistic about the development of the company. Maintain a "strongly recommended" rating.
Risk tips
Repeated overseas epidemics, changes in exchange rates and less than expected capacity expansion.
