\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 096 Yunnan Yuntianhua Co.Ltd(600096) )
Event: the company released the performance forecast for the first quarter of 2022. It is estimated that the net profit attributable to the parent company will be RMB 1.64 billion in 2022q1, a year-on-year increase of + 185.18% and a month on month increase of + 104.59%.
The performance of 2022q1 exceeded expectations, the price of chemical fertilizer continued to be high and the cost support was strong: the performance of the company increased significantly in the first quarter of 2022, mainly due to the realization of full load and efficient operation of large chemical plants, the continuous high price of chemical fertilizer, the increase in the profits of non fertilizer businesses such as polyformaldehyde, yellow phosphorus and calcium feeding, the improvement of the operating performance of the joint-stock company and the year-on-year increase in investment income. According to Baichuan, the prices of the company’s main fertilizer products diammonium phosphate, monoammonium phosphate, compound fertilizer and urea in 2022q1 are + 28.1% / + 6.1%, + 37.7% / – 7.5%, + 39.5% / + 0.4%, + 30.9% / – 1.1% respectively compared with 2021q1, and the current prices are + 0.3%, + 19.2%, + 11.8% and + 12.1% respectively compared with 2022q1. According to the announcement, the supply-demand relationship in the international fertilizer market is tight, and the international fertilizer price continues to be high. The company effectively coordinates the Chinese and international markets to realize the rational allocation of resources in the two markets. According to Baichuan, the prices of raw materials phosphate rock, synthetic ammonia, sulfur and coal in 2022q1 have changed by + 91.3%, + 10.6%, + 115.0% and + 49.6% respectively compared with 2021q1. At present, the prices have changed by + 22.9%, + 9.1%, + 17.8% and + 28.7% respectively compared with 2022q1, which is at a high level. The company’s “phosphate rock phosphoric acid” and synthetic ammonia are highly self-sufficient in energy production, has strong integration advantages, and plans the strategic reserve and procurement of purchased bulk raw materials, It has effectively alleviated the rising cost caused by the rising price of raw materials, provided strong cost support, and highlighted the competitive advantage of chemical fertilizer products.
Phosphate fertilizer is not light in the off-season, the domestic and foreign demand is good, and the boom is expected to remain high: according to the National Bureau of statistics, in 2021, China’s output of monoammonium phosphate was 12.53 million tons (year-on-year + 1.5%), and that of diammonium phosphate was 13.54 million tons (year-on-year – 4.3%); In 2021, the export volume of monoammonium phosphate in China was about 3.7859 million tons (year-on-year + 49.61%), and the export volume of diammonium phosphate was 6.569 million tons (year-on-year + 9.15%). There was strong demand in the international market and the price went up all the way. According to Baichuan, the FOB export price of diammonium phosphate in China has exceeded US $1000 / ton, up 170% from the beginning of 2021; The 64% Yunnan ex factory price of diammonium phosphate also continued to rise from 2400 yuan / ton in early 2021 to 3470 yuan / ton at present. The time of the greatest pressure on phosphate fertilizer inventory has passed, and the price remains strong. According to Baichuan, with the time of spring ploughing fertilizer approaching, China’s demand is strong, the amount of ammonium phosphate enterprises to be received and sent in advance is sufficient, and the market is in a state of short supply. Some export orders in the second quarter are expected to pass the legal inspection, the export will be liberalized, the internal and external demand will be good, and the high outlook of phosphate fertilizer is expected to be maintained. According to the announcement, in 2022, the company expects to produce and sell 5.95 million tons of phosphate compound fertilizer. For every 100 yuan / ton increase in price, the performance will be increased by about 400 million yuan.
Accelerate the layout of industrial transformation and develop industrial clusters such as new energy, fine phosphorus chemical industry and fluorine chemical industry: according to the announcement, in 2021, the company will seize the development opportunity of new energy industry and accelerate the construction of 500000 tons of iron phosphate and its supporting devices. The phase I 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. At the same time, the wholly-owned subsidiary Fushi science and technology 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, 10000 tons of magnesium fluorosilicate in red phosphorus chemical industry, the joint venture’s 5000 tons of lithium hexafluorophosphate project has been rapidly promoted, and the strategic layout of fine chemical industry cluster has been accelerated.
Investment suggestion: it is estimated that the net profit of the company from 2022 to 2024 will be 5 billion yuan, 5.2 billion yuan and 5.4 billion yuan respectively, corresponding to 9.8, 9.4 and 9 times of PE, maintaining the Buy-A rating.
Risk tips: raw material price fluctuations, product boom is less than expected, etc
