\u3000\u3 China Vanke Co.Ltd(000002) 545 Qingdao East Steel Tower Stock Co.Ltd(002545) )
Potassium fertilizer supply and demand mismatch, high prosperity or sustainable. We believe that under the background of escalating international conflicts, the demand for food security reserves in various countries has increased, and the recent rise in volume and price has also increased the acceptance of the downstream for the price of potash fertilizer, thus boosting the demand for potash fertilizer. In terms of supply, according to the prediction of IFA, the global potash fertilizer production capacity will increase by about 1.6% year-on-year in 2022, which is far from meeting the supply gap caused by the export restriction of Belarus (10-12 million tons of physical goods, accounting for about 20% of the world). Recently, the supply of other major producing areas, Russia and Canada, may continue to shrink due to international and Chinese problems. Therefore, we believe that potash fertilizer will be gradually resourced, and the current high boom is not a flash in the pan, It will last a long time. At present, the ex factory price of Qinghai Salt Lake is 3900 yuan / ton, a year-on-year increase of + 86%, with significant elasticity.
China's resources are relatively limited, and Laos is an ideal target for overseas potassium search. At present, China's annual demand for potash fertilizer is 16-18 million tons, of which about 50% depends on imports. However, China's potash fertilizer resources are limited by reserves and grade, and it is difficult to continue to develop in large quantities. Therefore, it is urgent to find potash abroad. Laos has the following advantages: 1) rich reserves and high grade, 2) adjacent to the main consumer markets China, India and Southeast Asia, 3) socialist countries, political stability and good relations with China. It is an ideal overseas potassium seeking target.
The company's expansion of potash fertilizer production meets the high boom and opens up space. The company's main business is steel structure. In 2016, it entered the potash fertilizer industry through M & A, and now has a production capacity of 500000 tons in Laos. At present, the company's 1.5 million ton expansion project is under construction. It is expected that the first phase of 500000 tons will be put into operation by the end of 2022, so as to grasp the high business cycle of the industry and further release the elasticity of the company's performance. The company's steel structure business is also expected to develop stably. Under the two wheel drive, the development of the company may be further accelerated
Profit forecast. It is estimated that from 2021 to 2023, the company's revenue will be 3.27/39.7/4.95 billion yuan, the net profit attributable to the parent company will be 431/7.41/926 million yuan, and eps0.5 billion yuan 35 / 0.60/0.74 yuan, corresponding to the closing price of 10.55 yuan on March 15, 30.48/17.70/14.17x PE. Give the company a target price of 13.20 yuan based on the price earnings ratio valuation method, and give a "buy" rating for the first time.
Risk warning. The demand is lower than expected, the supply release is higher than expected, the project progress is lower than expected, and there are systemic risks.
