\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 096 Yunnan Yuntianhua Co.Ltd(600096) )
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Event description
Yunnan Yuntianhua Co.Ltd(600096) released the annual report of 2021. During the reporting period, the company achieved a revenue of 63.249 billion yuan, a year-on-year increase of + 21.37%; The net profit attributable to the parent company was 3.642 billion yuan, a year-on-year increase of + 123877%; The net profit attributable to the parent company after deducting non recurring profits and losses was 3.511 billion yuan, a year-on-year increase of + 723750%; The weighted average return on net assets was 43.76%, an increase of 37.73 percentage points over the previous year; The basic earnings per share is 1.98 yuan.
Business performance reached a record high, and phosphorus chemical products maintained a high atmosphere
In 2021, the company’s operating performance hit a record high, with a year-on-year increase of more than 12 times. The company achieved a total operating income of 63.249 billion yuan, an increase of 21.37% over the same period last year; The operating profit was 5.133 billion yuan, an increase of 662.00% over the same period last year; The total profit was 4.87 billion yuan, an increase of 663.06% over the same period last year; The net profit attributable to shareholders of listed companies was 3.642 billion yuan, an increase of 123877% over the same period last year.
The relationship between supply and demand in the global fertilizer industry is tense, and the high outlook of phosphorus chemical products is maintained. Globally, the fertilizer industry is affected by the epidemic, the market supply is insufficient, and the relationship between supply and demand continues to be tight. At the same time, the cyclical rise of agricultural industry and the rise of Shenzhen Agricultural Products Group Co.Ltd(000061) price have promoted the price rise of chemical fertilizer products. With the recovery of China’s economy, the market price of chemical products of ammonium phosphate, yellow phosphorus and calcium feed companies has increased. The new capacity of ammonium phosphate is strictly limited, and the industry pattern is expected to be continuously optimized. The company has resource advantages, scale advantages and safety and environmental protection competitive advantages, and the profitability of the enterprise has been significantly improved.
The price of phosphorus chemical products rose, and the gross profit margin of the company’s six categories of products increased significantly. The products sold by the company in 2021 are mainly chemical fertilizer and phosphorus chemical products. Due to the impact of the epidemic, countries pay more attention to food security, which leads to the cyclical rise of food prices. There is an imbalance between supply and demand of required chemical fertilizers and other products, resulting in an obvious upward trend of chemical fertilizer prices in the market. During the epidemic period, the company took various measures to stabilize production and realize the steady growth of production and sales. In addition, the price boom of main products increased and the product price rose rapidly. The scale of operating revenue of most products of the company has increased significantly, and the profitability has also increased significantly. The company’s main products can be divided into six categories: (1) phosphate fertilizer, including monoammonium phosphate and diammonium phosphate. In 2021, the company’s operating revenue of monoammonium phosphate reached 3.623 billion yuan, a year-on-year increase of 44.07%, and the gross profit margin reached 27.66%, a year-on-year increase of 10.40 percentage points; The operating income of diammonium phosphate was 9.667 billion yuan, a year-on-year increase of 19.69%, and the gross profit margin reached 36.51%, a year-on-year increase of 17.37 percentage points; (2) For compound (mixed) fertilizer, the revenue in 2021 was 2.759 billion yuan, a year-on-year decrease of 9.40%, and the gross profit margin reached 13.86%, a year-on-year increase of 5.93 percentage points; (3) For urea, the revenue in 2021 was 3.382 billion yuan, a year-on-year increase of 25.69%, and the gross profit margin was 39.16%, a year-on-year increase of 13.32 percentage points; (4) Polyoxymethylene, with a revenue of 1.38 billion yuan in 2021, a year-on-year increase of 39.87%, and a gross profit margin of 45%, a year-on-year increase of 17.91 percentage points; (5) Yellow phosphorus, with a revenue of 350 million yuan in 2021, a year-on-year decrease of 13.58%, and a gross profit margin of 44.72%, an increase of 29.40 percentage points year-on-year; (6) The revenue of feed grade calcium phosphate in 2021 was 1.525 billion yuan, with a year-on-year increase of 40.54%, and the gross profit margin was 25.21%, with a year-on-year increase of 16.53 percentage points.
Build the advantages of phosphorus chemical integration, operate efficiently and improve the profitability of the company
The company creates the advantage of phosphorus chemical integration to realize efficient production and long-term operation. The company effectively gave full play to the advantages of the whole industrial chain integration of high self-sufficiency of bulk raw materials such as phosphate rock, phosphoric acid and synthetic ammonia, strengthened production management, realized high load and long-term operation of main chemical plants, and achieved 66 long-term cycles throughout the year. Some production plants broke the best operation records since the plant was put into operation, and the unit energy consumption and material consumption of products were well controlled.
The company gives full play to the advantages of platform procurement to alleviate the cost pressure of bulk raw materials. The company gave full play to the advantages of centralized procurement platform, accurately controlled the procurement rhythm of large raw materials such as sulfur and coal, effectively alleviated the impact of rising prices of bulk raw materials, and continued to enhance the competitive advantage of product costs. The company coordinates the international and Chinese markets, realizes the efficient linkage of production, logistics and sales, ensures the supply and price, and ensures the effective sales of products.
The company gives full play to the advantages of phosphorus chemical industry chain and improves the profitability of products. The chemical fertilizer and phosphorus chemical products mainly produced by the company have obvious advantages of industrial chain integration. The production of chemical fertilizer and phosphorus chemical products will involve phosphorus ore, sulfur and other raw materials. Urea also needs coal as raw material and energy to produce synthetic ammonia. The company has a relatively complete industrial chain, which can save costs for enterprise production. As one of the largest phosphate rock mining and dressing enterprises in China, the company has 14.5 million T / a phosphate rock production capacity, 6.18 million T / a scrubbing and beneficiation production capacity, 7.5 million T / a flotation production capacity, and the corresponding wet process phosphoric acid and thermal process phosphoric acid production technology and capacity. In terms of phosphorus chemical industry, the company has set up a phosphorus chemical industry subsidiary to clearly build the industrial chain of phosphate rock yellow phosphorus fine phosphate and phosphide. At the same time, it has carried out the deep processing of wet process phosphoric acid to build the industrial chain of phosphate rock wet process phosphoric acid refining phosphate. In 2021, the gross profit margin of the company’s main business increased significantly. The gross profit margin of chemical fertilizer and phosphorus chemical industry and phosphate ore mining and dressing business were 29.07%, 26.05% and 65.07% respectively, with a year-on-year increase of 11.81%, 15.57 and 17.14 percentage points respectively. With the gradual improvement and optimization of the vertical industrial chain of the company’s businesses and products, the self-sufficiency rate of production raw materials is gradually increased, and the production cost is expected to continue to reduce. It is expected that the profitability of the company still has a large room for improvement.
The company accelerated the layout of new energy industry and promoted the vertical extension of the industry
The company plans 500000 tons of iron phosphate and supporting projects to quickly cut into the iron phosphate track. As a leading enterprise in the phosphorus chemical industry, the company seized the development opportunity of new energy industry, announced on October 30, 2021 that it would invest in the construction of new material precursors and supporting projects for iron phosphate batteries with an annual output of 500000 tons, and actively layout the precursor materials of new energy batteries. The company plans to invest 7.286 billion yuan for construction, and the project is expected to be completed in stages. The first phase of iron phosphate project with an annual output of 100000 tons is expected to be completed and put into operation in the second half of 2022, and the production capacity and supporting facilities of 2×200000 tons will be completed in December 2023. The project is located in Anning Industrial Park, Anning City, Yunnan Province. Tianan chemical industry, a Yunnan Yuntianhua Co.Ltd(600096) subsidiary in the park, now has 700000 tons / year of fertilizer grade wet process phosphoric acid, 500000 tons / year of synthetic ammonia, 2 million tons / year of phosphate fertilizer and 100000 tons / year of water-soluble monoammonium phosphate. At the same time, the company has 2 million tons / year of phosphorus resource beneficiation capacity in Anning area.
At present, the advantages of the company in the upstream industrial chain will accelerate the construction of iron phosphate project. The company is expected to create an integrated cost advantage in iron phosphate products, optimize the product structure of the enterprise, and provide a new driving force for the future performance growth of the enterprise.
The company accelerated the development of new energy materials and phosphorus fine chemical products, and promoted the transformation of industrial structure. The company focuses on resources and industrial advantages, promotes the vertical extension of industry and promotes the transformation of industrial structure. The company and Do-Fluoride New Materials Co.Ltd(002407) established a joint venture to promote the construction of the comprehensive utilization project of fluorosilicone resources, the by-product of phosphate fertilizer. The production base of the project is located in Anning, Yunnan, and the construction capacity includes 2 × 15000 T / a anhydrous hydrofluoric acid, 15000 T / a high-quality white carbon black, 5000 t / a lithium hexafluorophosphate and 20000 t / a electronic hydrofluoric acid. Fushi technology, a wholly-owned subsidiary of the company, has an annual output of 4000 tons of phosphorus pentoxide, 22000 tons of polyphosphate (30000 tons of food grade phosphoric acid), 1500 tons of Fluoronitrobenzene and 10000 tons of magnesium fluorosilicate in red phosphorus chemical industry. The strategic layout of the company’s fine chemical industry cluster has been accelerated.
The double carbon policy limits the production capacity, superimposes the downstream demand, and the phosphorus chemical industry leader is expected to usher in the value revaluation. The double carbon policy limits superimpose the downstream demand, and the profit center of phosphorus chemical enterprises is up. In recent years, China’s fertilizer industry has carried out supply side reform, gradually clearing the excess capacity in the industry through environmental protection improvement and returning to the park. Through the two-way control of supply and demand, the capacity utilization rate in the fertilizer industry has rebounded, and the pattern of the fertilizer industry has been gradually improved. In addition, the rising food prices have led to the improvement of fertilizer demand and the profit of fertilizer products.
The overall capacity utilization rate of phosphorus chemical industry leaders remains high. In 2021, due to the influence of double carbon policies such as double control of energy consumption, the operating rate of phosphorus chemical industry was low and the capacity utilization rate decreased. However, as the leader of phosphorus chemical industry, the overall capacity and utilization rate of the company remained high. The total phosphate fertilizer production capacity of the company is 5.25 million tons / year, of which diammonium phosphate has a market share of 27% in China, and the overall phosphate fertilizer export accounts for about 20% of the national export. Most phosphate fertilizer production plants are close to or even exceed the full capacity in 2021; In terms of compound (mixed) fertilizer, the total production capacity of the company is 830000 tons / year. As its main sales markets are neighboring countries around China and Southeast Asia, the epidemic has had a great impact on border trade exports. The output of compound (mixed) fertilizer of the company decreased in 2021, but the utilization rate of production capacity still exceeded 80%; In terms of urea, the company has a total production capacity of about 2 million tons / year, which has a regional competitive advantage. The market share of products in Yunnan is as high as 50%. Due to the dual control of energy consumption and the impact of safety accidents, the utilization rate of Jinxin chemical and Dawei ammonia production capacity in the company’s urea production plant is low, but the utilization rate of production capacity in Shuifu plant is 99.43%; In terms of polyoxymethylene, the company currently has a production capacity of 90000 tons / year, which is the leader of China’s polyoxymethylene industry. The market share of China is about 20%, and the market share of domestic polyoxymethylene is as high as 30%; In terms of yellow phosphorus, the company’s capacity is 30000 tons / year. Due to the influence of dual control of energy consumption, the capacity utilization rate has decreased to 82.36%; In terms of calcium feeding, the production capacity is 500000 tons / year, of which MDCP products account for about 60% of the Chinese market and 10% of the national calcium phosphate consumption market. The overall utilization rate reached the state of overproduction in 2021.
As a leading enterprise of phosphorus chemical integration, the company’s profit center is expected to usher in value revaluation. As a leading enterprise integrating phosphorus chemical industry, the company has a raw ore production capacity of 14.5 million tons / year. It is one of the largest phosphorus ore mining and dressing enterprises in China. The production capacity of phosphate fertilizer ranks second in China and fourth in the world. Among them, the company’s diammonium phosphate products have a market share of about 27% in China, ranking first in China. The export volume of ammonium phosphate accounts for about 20% of the national export volume. The company’s urea production capacity is 2 million tons, with a market share of about 50% in Yunnan. The production capacity of polyoxymethylene products ranks first in China, and the product quality reaches the leading level of domestic polyoxymethylene. The capacity of feed grade calcium phosphate is 500000 tons, of which the capacity of MDCP (feed grade calcium phosphate) is 450000 tons. At the same time, it occupies about 60% of China’s MDCP consumption market. In addition, the 100000 tons of refined phosphoric acid, 500000 tons of iron phosphate and supporting projects planned by the company are gradually put into operation, the integration advantage of the company’s phosphorus industry chain will be more significant, and the profitability of the company is expected to be significantly improved in the future. With the rise of the company’s profit center, the leader of phosphorus chemical industry is expected to usher in value revaluation, and the rapid development of new energy business is expected to open a new chapter in the company’s growth.
Investment advice
As a leading enterprise in China’s phosphorus chemical industry, the company’s performance is expected to continue to grow with the maintenance of the high outlook of the phosphorus chemical industry. In addition, the company’s layout of new energy will bring business structure adjustment and inject new impetus into the company’s long-term development. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 4.386 billion yuan, 4.591 billion yuan and 4.954 billion yuan respectively, with a year-on-year growth rate of 20.4%, 4.7% and 7.9%. The corresponding PE is 10.7, 10.3 and 9.5 times respectively. For the first time, give a “buy” rating.
Risk tips
Risk of sharp decline in product price; The risk that the project construction progress is less than expected; The risk that the project approval progress is less than expected; Risk of sharp fluctuations in raw material prices
