\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 93 Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) )
Event overview
On April 2, 2022, the company released its annual report for 2021, realizing an annual operating revenue of 833 million yuan, a year-on-year increase of 129.36%; The net profit attributable to shareholders of listed companies was 895 million yuan, a year-on-year increase of 140143%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 290 million yuan, with a year-on-year increase of 623251%.
Analysis and judgment:
The company’s 1 million ton potash fertilizer project has reached production capacity
As of April 2, 2022, the company’s 1 million T / a potash fertilizer reconstruction and expansion project in Laos has met the conditions for 72 hour continuous operation and production acceptance after orderly engineering construction, equipment installation and commissioning, trial production and process optimization. The output scale of the company’s potash fertilizer products has been increased to 1 million tons per year. The company’s output of potash fertilizer last year was 332000 tons. If it achieves full production this year, the output of potash fertilizer is expected to increase by nearly three times year-on-year.
Potash prices rise
According to Zhuo Chuang information, the price of potassium chloride in China has nearly doubled from 2100 yuan / ton at the beginning of last year to 4000 yuan / ton at the end of last year. At the beginning of this year, the contract price of potassium fertilizer in China was locked at US $590 / ton, with a year-on-year increase of US $343 / ton, about equivalent to the self raised price of port standard potassium chloride of 42004300 yuan / ton. Then, affected by Russia’s suspension of fertilizer exports, the price of potassium fertilizer continued to rise. Recently, the State Reserve potash fertilizer began to be put into use at a price of 4450 yuan / ton. We believe that the short-term potash price is expected to remain stable, but the global potash supply gap still exists, and the subsequent price is still expected to rise.
Investment advice
Due to the company’s 1 million ton potash fertilizer project reaching the production capacity and the significant rise in the price of potash fertilizer, we raised the company’s potassium chloride production and sales price, maintained the “overweight” rating, raised the company’s operating revenue in 2022 and 2023 from 2.31 billion yuan and 3.3 billion yuan to 2.8 billion yuan and 3.315 billion yuan respectively, and raised the EPS in 2022 and 2023 from 1.24 yuan and 1.92 yuan to 2.12 yuan and 2.24 yuan respectively. We expect that from 2022 to 2024, the company’s operating revenue will be RMB 2.800 billion, RMB 3.315 billion and RMB 3.510 billion respectively, the net profit attributable to the parent company will be RMB 1.603 billion, RMB 1.692 billion and RMB 1.829 billion respectively, and the EPS will be RMB 2.12, 2.24 and 2.42 respectively, corresponding to the closing price of RMB 40.42 on April 8, and the P / E ratios will be 16, 15 and 14 times respectively.
Risk tips
Macroeconomic risks, sharp fluctuations in potash prices, changes in trade policies in Laos and lagging project progress.
