\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 096 Yunnan Yuntianhua Co.Ltd(600096) )
Event: the company released the first quarterly report of 2022. The company’s main revenue was 14.962 billion yuan, a year-on-year increase of 13.28%; The net profit attributable to the parent company was 1.646 billion yuan, a year-on-year increase of 186.15%; Deducting non net profit of RMB 1.593 billion, a year-on-year increase of 224.63%.
Comments:
The first quarter performance exceeded market expectations for three reasons
1) the product price is high, and the production and sales are basically flat: the income growth is mainly due to the increase of product price. During the reporting period, the average price excluding tax of the company’s main products phosphoric acid, compound fertilizer, urea, paraformaldehyde, yellow phosphorus and feed grade calcium phosphate 22q1 were 3585 / 3279 / 2488 / 19352 / 28935 / 3622 yuan / ton respectively, with year-on-year increases of 44%, 49%, 29%, 55%, 100% and 68% respectively. The production and sales volume were flat year-on-year, due to the full completion of China’s “light fertilizer storage” and “summer fertilizer management” reserve tasks, which were less affected by the export legal inspection.
2) cost advantages brought by integration and strategic procurement: during the reporting period, the main raw materials phosphorus ore, synthetic ammonia, sulfur and coal increased significantly year-on-year, and the cost pressure increased. The company’s “phosphate rock phosphoric acid” and synthetic ammonia production capacity was highly self-sufficient. The company coordinated strategic procurement to increase the income of raw material inventory.
3) the profits of polyoxymethylene, yellow phosphorus and other non fertilizer businesses increased significantly: overseas energy prices were high, polyoxymethylene, yellow phosphorus and other products had the comparative advantages of raw materials and energy costs, and the profits increased significantly during the reporting period.
Join hands with new energy leaders to layout iron phosphate, and the transformation of phosphorus chemical industry is at the right time
In February 2022, the company signed the cooperation agreement on the whole industry chain project of new energy batteries with Yuxi Municipal government, Enjie, Yiwei and Huayou, and planned the “500000 T / a iron phosphate battery new material precursor and supporting project”, of which the production capacity of phase I 100000 t / a iron phosphate and supporting project is expected to be completed and put into operation by the end of June 2022, The remaining 400000 T / a capacity of iron phosphate and supporting projects is expected to be completed and put into operation by the end of December 2023. Under the tide of energy transformation, as one of the largest phosphorus ore manufacturers in China, the company has the advantages of cost and raw material supply, and iron phosphate will also become the growth point of the company’s performance.
Profit forecast and investment suggestions
We estimate that the company’s revenue from 2022 to 2024 will be 70 / 70.8/71 billion yuan respectively, the corresponding net profit attributable to the parent company will be 53.5/56.5/6 billion yuan respectively, the corresponding EPS will be 2.91/3.08/3.27 yuan respectively, and the current share price will be 10 / 10 / 9 times of PE respectively. It will be covered for the first time and given a “buy” rating.
Risk tips
Risk of falling prices of ammonium phosphate and urea; Risk that the construction progress of iron phosphate is less than expected.
