\u3000\u3 China Vanke Co.Ltd(000002) 539 Chengdu Wintrue Holding Co.Ltd(002539) )
Event 1: on the evening of April 14, the company released its annual report for 2021. In 2021, the company achieved a revenue of 14.898 billion yuan, a year-on-year increase of + 62.74%; The net profit attributable to the parent company was 1.232 billion yuan, a year-on-year increase of + 147.06%. In 2021q4, the company achieved an operating revenue of RMB 4.806 billion, a month on month increase of +19.92% and a year-on-year increase of +104.47%; The net profit attributable to the parent company was 451 million yuan, a month on month increase of + 19.62% and a year-on-year increase of + 252.36%.
Event 2: on the evening of April 14, the company released the performance forecast for the first quarter of 2022. From January to March 2022, the company expects to realize a net profit attributable to the parent company of about 450480 million yuan, with a year-on-year increase of about 149.15% – 165.76%; It is estimated that the net profit attributable to the parent company after deducting non-profit is about 436466 million yuan, with a year-on-year increase of about 121.93% – 137.20%.
Comments:
Phosphate fertilizer, soda ash and other industries maintained a high boom, and the company’s performance continued to increase significantly in 2021 and 2022q1
Supported by the rising prices of raw materials and the strong demand of phosphate fertilizer, phosphate chemical industry, soda ash and other industries, the prices of the company’s main products increased significantly in 2021, and the sales of compound fertilizer, monoammonium phosphate and other products increased significantly. Among them, the average sales price of compound fertilizer, monoammonium phosphate, phosphorus chemical products (yellow phosphorus, etc.) and combined alkali (soda ash, ammonium chloride, etc.) in 2021 increased by 17.63%, 30.8%, 59.0% and 54.9% respectively year-on-year. In terms of sales volume, the sales volume of compound fertilizer of the company increased by 10.41% year-on-year in 2021, of which the sales volume of conventional compound fertilizer and new compound fertilizer increased by 3.75% and 20.13% year-on-year respectively; At the same time, the sales volume of monoammonium phosphate products of the company increased significantly by 32.88% year-on-year. The company has a complete industrial chain of nitrogen fertilizer and phosphorus fertilizer except urea, and the main raw materials are basically self-sufficient. Under the condition of continuous rise of raw materials and tight supply, the company’s cost advantage and industrial pricing power are further highlighted. In 2021, the overall gross profit margin increased by 0.74pct year-on-year, of which the gross profit margin of the company’s joint alkali products and phosphorus chemical products increased significantly year-on-year, by 5.70pct and 15.92pct respectively. In Q1 2022, the company’s compound fertilizer, phosphate fertilizer, phosphorus chemical industry, soda ash and other products still maintained a high boom, and the average selling price of most products was basically the same or showed a further growth trend compared with Q4 2021. Benefiting from this, Q1 company’s performance in 2022 increased significantly year-on-year and slightly month on month, exceeding market expectations.
The production capacity of compound fertilizer and iron phosphate was expanded simultaneously to help the company grow continuously
At present, the company has a production capacity of 5.2 million tons of compound fertilizer, 430000 tons of monoammonium phosphate, Shanghai Pudong Development Bank Co.Ltd(600000) tons of yellow phosphorus and Shanghai Pudong Development Bank Co.Ltd(600000) tons of soda ash and ammonium chloride. In addition, the company is carrying out the capacity expansion of compound fertilizer and the large-scale layout of iron phosphate and supporting capacity in an orderly manner. In terms of compound fertilizer, the company currently has a capacity of 1.2 million T / A under construction, of which the Shanghai Pudong Development Bank Co.Ltd(600000) T / a compound fertilizer project is expected to be completed and put into operation in June 2022, and the Shanghai Pudong Development Bank Co.Ltd(600000) T / a compound fertilizer project is expected to be completed and put into operation in December 2023. The completion of the new production capacity of compound fertilizer will further enhance the company’s leading position in the compound fertilizer industry.
In addition, in terms of new energy materials, the company is currently building 350000 T / a iron phosphate and related supporting capacity projects, and further plans to build 100000 t / a battery grade iron phosphate and related supporting capacity projects in Xiangyang fine chemical park, Hubei Province. The total investment of the above two projects is about 6.7 billion yuan, of which the company plans to raise no more than 2.5 billion yuan through non-public offering, of which 2 billion yuan will be used to build 350000 T / a iron phosphate and supporting capacity projects. The company’s phase I 100000 t / a iron phosphate project is expected to be completed and put into operation in March 2023, phase II 250000 T / a iron phosphate and related supporting projects are expected to be completed and put into operation in December 2023, and the remaining 100000 t / a iron phosphate and supporting capacity projects are expected to be completed around 2025 (construction period of 3 years). The iron phosphate project planned by the company has complete upstream and downstream supporting facilities of the industrial chain and has significant integration advantages. Meanwhile, the company’s two iron phosphate production capacity planning locations are located in Hubei Province, respectively in Songzi, Hubei and Xiangyang, Hubei. Hubei Province is a transportation hub in Central China, which is very convenient in product transportation.
Profit forecast, valuation and rating: the company’s compound fertilizer, phosphate fertilizer, soda ash and other products maintained a high boom, which prompted the company’s Q1 performance in 2022 to exceed expectations again. We believe that the high prosperity of the company’s main products is still expected to continue, so we raised the company’s profit forecast from 2022 to 2023 and added the company’s profit forecast for 2024. As the company’s iron phosphate project has not been implemented yet, we will not consider the corresponding performance increment for the time being. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 15.6 (up 16.6%) / 17.1 (up 12.4%) / 1.86 billion yuan respectively. The current share price corresponds to about 9.5 times of PE in 2022, and still maintains the “buy” rating of the company.
Risk tips: fixed increase landing risk, product price fluctuation risk, less than expected capacity release, safety production and environmental protection risk.
