\u3000\u30 China Baoan Group Co.Ltd(000009) 02 Xinyangfeng Agricultural Technology Co.Ltd(000902) )
Xinyangfeng Agricultural Technology Co.Ltd(000902) released the annual report of 2021: the annual operating revenue was RMB 11.802 billion, yoy + 17.21%, and the net profit attributable to the parent company was RMB 1.210 billion, yoy + 28.22% (adjusted according to the net profit of 2020). Benefiting from the rising price of phosphate and compound fertilizer products, the growth rate of the company’s revenue is higher than that of sales, and the gross profit margin of products has increased, resulting in the growth rate of net profit higher than that of revenue, and the company’s annual performance has achieved steady growth. In 2021, the market price of phosphate fertilizer and compound fertilizer in China generally rose, driving the growth rate of the company’s revenue higher than that of sales. Among them, the company’s phosphate fertilizer achieved a revenue of 2.118 billion yuan, yoy-1.2%, sales volume of 782200 tons, yoy-30.88%, mainly due to the large base in 2020; The revenue of conventional compound fertilizer was 6.552 billion yuan, yoy + 16.44%, and the sales volume was 2.9283 million tons, yoy-0.37%; The new compound fertilizer achieved a revenue of 2.562 billion yuan, yoy + 42.56%, and a sales volume of 903400 tons, yoy + 25.44%. The company’s comprehensive gross profit margin increased slightly by 0.9 percentage points to 18.9%. Among them, the gross profit margin of phosphate fertilizer increased by 3.01 percentage points to 20.54%, mainly due to the price rise caused by tight supply and demand; The gross profit margin of conventional compound fertilizer decreased by 1.57 percentage points to 14.69%, mainly due to the sharp rise in the price of raw material simple fertilizer; The gross profit margin of new compound fertilizer increased by 1.77 percentage points to 24.22%, mainly due to the upgrading of the company’s product categories.
The leading market share of compound fertilizer increased steadily. The company’s sales volume of compound fertilizer ranks first in China and the industrial chain is integrated. It has bucked the trend in the integration of the adjustment period of the chemical fertilizer industry since 2016. Affected by the decline of industry prosperity, most enterprises in the compound fertilizer industry have faced the decline of gross profit margin and sales since 2016. Relying on the integrated cost advantage, channel customer stickiness and independent product innovation built over the years, the company has built a stable business moat, so as to realize the continuous and stable growth of compound fertilizer sales, from 206700 tons in 2015 to 3.8317 million tons in 2021, with an annual compound growth rate of 6.63% and a cumulative increase of 46.99%. The market share of the company has increased from 4.56% in 2015 to 7.96% in 2021. At the same time, through the layout and development of the new fertilizer market, the product structure is constantly upgraded, and the sales proportion of new compound fertilizer is increased year by year, driving the overall gross profit margin trend of compound fertilizer upward. We expect that the market share of the company’s compound fertilizer in the future, especially the new compound fertilizer, is expected to continue to increase steadily.
Lay out the new energy industry, expand the phosphorus chemical industry chain and open the second growth curve. The company has successively invested and built iron phosphate production bases in Zhongxiang, Hubei and Yidu, Hubei. It is expected to invest 6 billion yuan to build 300000 tons of iron phosphate, 150000 tons of lithium iron phosphate and related supporting projects. Among them, RMB 2.5 ~ 3 billion is invested to establish joint ventures with Jiangsu Lopal Tech.Co.Ltd(603906) subsidiaries and Gem Co.Ltd(002340) subsidiaries respectively to build 200000 tons of iron phosphate and related supporting projects. It is planned to invest in no less than 100000 tons / year lithium iron phosphate project led by Gem Co.Ltd(002340) in the form of equity participation; In addition, it signed a project with Yidu Municipal People’s government to invest 3 billion yuan to build an annual output of 100000 tons of iron phosphate, 50000 tons of lithium iron phosphate and supporting 100000 tons of refined phosphoric acid production line. The completion of the project can expand the company’s business scale in the phosphorus chemical industry chain, give full play to the high synergy with the existing phosphate rock and phosphorus compound fertilizer business, and consolidate the company’s leading advantage in the phosphorus chemical industry.
Profit forecast and investment rating of the company: the company is a leading enterprise in China’s phosphate and compound fertilizer industry. With the advantages of industrial chain integration, the market share has increased steadily in recent years. At the same time, the company has laid out the new energy industry and opened up long-term development space. Based on the company’s 2021 annual report, we adjusted the company’s profit forecast from 2022 to 2024 accordingly. We predict that the net profit of the company from 2022 to 2024 will be 1.536 billion yuan, 1.888 billion yuan and 2.357 billion yuan respectively, and the corresponding EPS will be 1.15, 1.42 and 1.77 yuan respectively. The corresponding P / E value of the current stock price will be 16, 13 and 11 times respectively. Maintain a “strongly recommended” rating.
Risk tip: the price of raw material simple fertilizer fluctuates sharply Shenzhen Agricultural Products Group Co.Ltd(000061) the price rise is lower than expected; The launch progress of new capacity is less than expected.
