Xinyangfeng Agricultural Technology Co.Ltd(000902) (000902)
Event: on January 4, the company announced that its wholly-owned subsidiary Yangfeng Chuyuan New Energy Technology Co., Ltd. (hereinafter referred to as “Yangfeng Chuyuan”) planned to sign the investment / service agreement for investment promotion projects with Yidu Municipal People’s government. Yangfeng Chuyuan will build a production line with an annual output of 100000 tons of iron phosphate and 50000 tons of lithium iron phosphate in Yidu chemical park, and a 100000 tons of refined phosphoric acid production line. The total investment of the project is planned to be 3 billion yuan, and the construction time of the project is expected to be 18 months (from the date of obtaining the land real estate certificate).
Further expand the production capacity of phosphorus based new energy materials and deepen the layout of new energy industry. On the basis of the 200000 tons of iron phosphate project planned and constructed in the early stage, the company further planned the production capacity of 100000 tons of iron phosphate, and added an additional capacity of 50000 tons of lithium iron phosphate. On the one hand, this plan expands the original plan of iron phosphate, on the other hand, it further extends to the downstream lithium iron phosphate business, and deepens the company’s industrial layout in phosphorus based new energy materials. The company will put into operation 50000 tons and 150000 tons of iron phosphate in February and December 2022, respectively, ranking among the top phosphorus chemical enterprises in China. In addition, the company has in-depth cooperation with Jiangsu Lopal Tech.Co.Ltd(603906) a leading enterprise in China’s lithium iron phosphate industry, which is conducive to the company’s rapid mastery of the production technology of iron phosphate and binding the downstream customers of iron phosphate products in advance. With the rapid development of new energy vehicle industry and the high penetration rate of lithium iron phosphate battery, the demand for lithium iron phosphate cathode material is expected to continue to increase. As a leader in phosphorus chemical industry, the company is expected to stand out in the competition of lithium iron phosphate industry with its own resource advantages and cost advantages.
Phosphorus and compound fertilizer industry leader, phosphorus chemical industry chain integration is complete. As one of the leaders in China’s phosphate and compound fertilizer industry, the company has sufficient phosphate rock and ammonium phosphate resources. In terms of ammonium phosphate, the company has a production capacity of 1.8 million tons / year of monoammonium phosphate, including 150000 tons / year of industrial monoammonium phosphate. In terms of phosphate rock, Yangfeng group, the parent company of the company, currently has phosphate rock resource reserves of up to 500 million tons. In July 2021, the parent company Yangfeng Group officially injected 900000 T / a phosphorus ore capacity of Leibo mining into the company according to the principle of “mature one into one”. At the same time, it plans to inject 50% equity of Jingmen fangmashan China phosphorus Mining Co., Ltd. into the company, which will improve the integrated construction of the company’s phosphorus chemical industry chain and consolidate the company’s competitive advantage. In addition, in order to meet the production needs of iron phosphate project, the company has also arranged a number of supporting capacity such as beneficiation, phosphoric acid, sulfuric acid and phosphogypsum, which is conducive to the company to give full play to the synergy of industrial chain.
Profit forecast, valuation and rating: the project is still in the planning stage, and we will not consider the performance increment of the project for the time being. Maintaining the company’s profit forecast from 2021 to 2023, it is expected that the company will realize the net profit attributable to the parent company of RMB 1.203, 1.544 and 2.047 billion respectively from 2021 to 2023, equivalent to EPS of RMB 0.92, 1.18 and 1.57 per share respectively. The company’s further layout of iron phosphate and lithium iron phosphate capacity will help the company’s development in the field of phosphorus based new energy materials and maintain the company’s “buy” rating.
Risk tip: the capacity construction is less than expected, the product price fluctuation risk, the market demand is less than expected, and the supply and demand structure of lithium iron phosphate changes significantly.
