\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 93 Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) )
The performance in 2021 was in line with expectations, and the revenue and profit increased month on month. In 2021, the annual revenue was 833 million yuan (+ 129.4%), the net profit attributable to the parent was 895 million yuan (+ 1401.4%), and the net profit not attributable to the parent was 290 million yuan (+ 6232.5%), which was mainly due to the company’s receipt of litigation compensation and liquidated damages totaling 626 million yuan, which was included in non operating income. Q1-Q4 single quarter revenue was 1.25/1.04/2.09/394 million yuan respectively, and the net profit deducted from non parent company was 0.17/0.12/0.60/200 million yuan respectively. The company’s annual gross profit margin reached 65.24%, with a year-on-year increase of 21.46pp, the best level in history.
The 1 million T / a potash fertilizer reconstruction and expansion project reached the production capacity, and the volume and price of potash fertilizer increased simultaneously, which fully benefited the company. In 2021, the company completed the technical transformation of 250000 tons of production units to improve quality and efficiency. The 750000 tons of potassium salt expansion and transformation project started the commissioning in September and turned into formal production in December. By the end of March 2022, the company had fully reached the production capacity, with a daily output of more than 3000 tons. At present, the company’s potash business revenue accounts for 100%. In 2021, the annual revenue is 833 million yuan (+ 129.4%), the output is 332000 tons (+ 31.9%), the sales volume is 350000 tons (+ 48.9%), the average price is 2343 yuan / ton (+ 55.6%), and the gross profit margin is 65.2 (+ 21.5pp).
The overseas supply of potash fertilizer is frequently subject to force majeure, and the company’s potash fertilizer sales in Southeast Asia have price elasticity. Belarus and Russia account for 37% of the global potash supply, and the export of potash fertilizer is limited due to sanctions and geographical conflicts; At the same time, with the rising prices of grain and bulk commodities, the global price of potash fertilizer has risen sharply. In 2021, the company’s overseas revenue accounted for 71.6%, mainly sold to Southeast Asia, which is one of the main consumption markets of potash fertilizer in the world. At present, the price is $670750 / ton CFR, higher than China’s $590 / ton CFR. The company’s potash fertilizer sales in Southeast Asia have greater price elasticity.
Continue to promote the acquisition of Pengxia nongbo potash mine and expand the reserve of potash mine resources. The company has 35 square kilometers of potash mining rights in Gammon Province, Laos, with a total reserve of 1.002 billion tons, converted into 152 million tons of pure potassium chloride. We are promoting the acquisition of 179.8 square kilometers of potassium salt mine in Pengxia nongbo village, nongbo County, Gammon Province, Laos, which is connected with the existing potassium salt mining area, with a total reserve of about 3.935 billion tons and about 677 million tons of pure potassium chloride. The company plans to increase its production capacity to more than 3 million tons within 3-5 years and build a world-class potash fertilizer supplier. Risk tips: systemic risks such as local regional conflicts and infectious diseases; The construction progress of new capacity of potash fertilizer may be lower than expected; The high price of potash fertilizer leads to lower downstream demand than expected.
Investment suggestion: maintain the profit forecast from 2022 to 2023 and maintain the “buy” rating.
Maintain 20222023 and add the profit forecast for 2024. It is estimated that the net profit attributable to the parent company in 20222024 will be RMB 1.53/17.8/2.2 billion, with a year-on-year growth rate of 71 / 17 / 23%; Diluted EPS = 2.02/2.35/2.90 yuan, and the current share price corresponds to PE = 17 / 15 / 12x. The company’s 1 million T / a potash fertilizer reconstruction and expansion project in Laos successfully reached production capacity, fully benefited from the high outlook of the potash fertilizer industry and maintained the “buy” rating
