At present, the potash fertilizer market has attracted much attention. Due to the soaring price of potash fertilizer, the performance of Companies in the industry has also risen.
On the evening of April 1, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ( Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ) released its 2021 annual report. Last year, the company achieved a revenue of 833 million yuan, a year-on-year increase of 129.36%, a net profit of 895 million yuan, a year-on-year increase of 140143%, and a deduction of non net profit of about 290 million yuan, a year-on-year increase of 623251%. In addition, the company’s operating cash flow also increased significantly, reaching 484 million yuan, a year-on-year increase of 363%.
On the same day, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) also announced that the “1 million T / a potash fertilizer reconstruction and expansion project in Laos” invested by the company has achieved stable production and reached the production capacity and product quality planned in the project design. After the project is completed, the output scale of Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) potash fertilizer products will be increased to an annual output of 1 million tons. It is reported that the project is the first million ton potash fertilizer project outside China and will also be the largest potash fertilizer project in Southeast Asia.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) said that the company plans to increase its production capacity to more than 3 million tons within 3-5 years to meet the huge market demand in the surrounding Southeast Asia and China, and build a potash fertilizer production and reserve base outside China.
It is understood that in 2021, with the rise in the prices of grain and bulk commodities, the global price of potash fertilizer showed a sharp rise. Affected by the EU and the United States’ sanctions on Belarus and the rising international shipping charges, the transportation of potash fertilizer has been blocked, which has exacerbated the global shortage of potash fertilizer supply and made the global potash fertilizer market price reach a historical high in recent 10 years.
According to the data, China’s Salt Lake potash fertilizer increased by 70.3% in 2021. Recently, China signed a 2022 potassium fertilizer contract with potash company, with the price of 590 US dollars / ton CFR, a new high since 2008 and an increase of 343 US dollars / ton compared with 2021.
Recently, many places have entered the spring farming season, with strong demand for potash fertilizer, and the spot gap in the potash fertilizer market has gradually emerged. At present, domestic potash fertilizer accounts for 40% ~ 50% of China’s potash fertilizer market, and the rest depends on imports, mainly from Canada, Russia and Belarus.
In order to alleviate the tight supply and demand in the market, the national development and Reform Commission and the Ministry of Finance jointly issued a notice a few days ago to deploy Sinochem Group, China agricultural means of production group and China Chemical Construction Co., Ltd. to put 1 million tons of national potassium fertilizer reserves in the near future. At the same time, they actively organized the import of potassium fertilizer to be put on the Chinese market in time to effectively ensure the needs of agricultural production during spring farming this year.
East Asia Qianhai Securities pointed out that 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 this background, the stock price rises strongly. Data show that Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) share price has increased by nearly 120% since December last year, among which, it has increased by 67.64% since February, closing at 34.43 yuan / share as of April 1. At the same time, northbound capital has continuously increased its positions, with the latest holding of 13180500 shares. Seven weeks ago, it only held 1879200 shares, with a shareholding increase of more than six times.
From the perspective of the whole chemical fertilizer industry sector, the growth rate has exceeded 12% since late March this year, with Kunming Chuan Jin Nuo Chemical Co.Ltd(300505) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Hubei Forbon Technology Co.Ltd(300387) , Stanley Agriculture Group Co.Ltd(002588) , Sichuan Lutianhua Company Limited(000912) , st day leading the rise.
Western Securities Co.Ltd(002673) believes that after the peak demand season in China, China’s simple fertilizer is expected to increase profits through export, and the performance of relevant enterprises has obvious flexibility. Chinese compound fertilizer enterprises are expected to benefit from the price control of single quality fertilizer and the rise of demand side.
