\u3000\u30 China Baoan Group Co.Ltd(000009) 02 Xinyangfeng Agricultural Technology Co.Ltd(000902) )
Event overview
The company released its annual report for 2021. During the reporting period, the company achieved an operating revenue of RMB 11.802 billion, a year-on-year increase of 17.21%; The net profit attributable to the parent company was 1.210 billion yuan, a year-on-year increase of 28.22%. In the fourth quarter alone, the operating revenue was 2.263 billion yuan, a year-on-year increase of 23.92%; The net profit attributable to the parent company was 159 million yuan, a year-on-year decrease of 0.14%. The company expects to distribute a cash dividend of 2.00 yuan (including tax) to all shareholders for every 10 shares based on the total share capital (excluding repurchased shares) on the equity registration date when the annual equity distribution plan in 2021 is implemented in the future. The company released the first quarterly report of 2022. During the reporting period, the company achieved an operating revenue of 4.545 billion yuan, a year-on-year increase of 37.25%; The net profit attributable to the parent company was 407 million yuan, a year-on-year increase of 24.14%.
Analysis and judgment:
The main business grew steadily, and compound fertilizer contributed to the performance increment. In 2021, the company achieved an operating revenue of 11.802 billion yuan, yoy + 17.21%. The main performance increment was contributed by compound fertilizer, and the gross profit margin increased by 0.9pct to 18.90%. Specifically, in terms of phosphate and compound fertilizer, during the reporting period, the company achieved a sales volume of 4.614 million tons of phosphate and compound fertilizer, yoy-3.69%, and the sales revenue accounted for 95.17% of the revenue. Among them, the sales volume of phosphate fertilizer is 782200 tons, yoy-30.88%, which is caused by the excessive base in 2020, and the sales revenue accounts for 17.95% of the operating revenue; The sales volume of conventional compound fertilizer was 2.9283 million tons, yoy-0.37%, which was caused by the continuous sharp rise of raw materials and the price sensitivity of the downstream. The sales revenue accounted for 55.52% of the revenue; The sales volume of new compound fertilizer is 903400 tons, yoy + 25.44%, and the sales revenue accounts for 21.71% of the operating revenue; The revenue from other businesses reached 64 million yuan, yoy-75.76%. In the first quarter of 2022, the company achieved an operating revenue of 4.545 billion yuan, with a year-on-year increase of 37.25%, mainly due to the year-on-year increase in the sales volume and market price of the company’s main products in this period.
The landscape of the planting industry chain is improved, and the demand for phosphorus and compound fertilizer continues to improve. The company is the leader of compound fertilizer in China. At present, the market share of compound fertilizer is about 8%. It has a production capacity of 1.85 million tons of monoammonium phosphate (including 150000 tons / year of industrial monoammonium phosphate), ranking first in the country. Its products can fully meet their own use and can also be partially exported. In addition, the company is the only enterprise in the top three in the scale of the compound fertilizer industry with the right to self import potassium fertilizer. The annual import of potassium fertilizer can meet half of the company’s production demand. The company has an annual production capacity of about 9 million tons of various high concentration phosphorus compound fertilizers. In 2021, about 900000 tons of new fertilizer capacity was added. It is expected that the 400000 tons of new fertilizer project in Jinchang phase I of Gansu Province will be put into operation in 2022. From the perspective of the whole industry, the importance of food security has become increasingly prominent, driving the improvement of the landscape of the planting industry chain and the demand for compound fertilizer; The company continues to strengthen the integrated layout of the upstream industrial chain. So far, it has the annual production capacity of 1.85 million tons of ammonium carbonate, the right to import potassium fertilizer and the supporting production of 150000 tons / year of synthetic ammonia, which has built a moat of the company’s cost advantage and helped to consolidate the core competitiveness of the main business of phosphorus compound fertilizer. The improvement of phosphate compound fertilizer landscape and the superposition of company scale advantages and cost advantages will help to thicken the company’s profits.
Layout of new energy industry, rich phosphorus chemical industry chain. The company is one of the leading enterprises in the phosphorus chemical industry chain. It now has an annual production capacity of 1.85 million tons of monoammonium phosphate (including 150000 tons of industrial monoammonium phosphate). The production capacity of monoammonium phosphate is the largest in China, and has phosphate rock assets with a design capacity of 900000 tons / year. In 2021, in order to enrich the product layout of phosphorus chemical industry chain, seize the development opportunity of new energy market and meet the growing demand for new energy materials at home and abroad, the company established Yangfeng Chuyuan New Energy Technology Co., Ltd., a wholly-owned subsidiary. It 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, consolidate the company’s leading advantage in the phosphorus chemical industry and improve the comprehensive profitability.
Investment advice
Our analysis: 1) benefiting from the recovery of the downstream planting industry chain, the demand for chemical fertilizer will continue to improve. As the leader of chemical fertilizer in China, the company has obvious cost advantages. 2) The commissioning of iron phosphate project is expected to increase the company’s profit. With the upward prosperity of the industry, the company’s profit is expected to be released gradually. Considering the influence of these factors, the income of 22 / 23 was increased from 14.029/17.405 billion yuan to 14.370/18.548 billion yuan, the new 24-year income was 19.971 billion yuan, the net profit attributable to the parent company in 22 / 23 was reduced from 1.661/23.26 billion yuan to 1.591/22.59 billion yuan, the new 24-year net profit attributable to the parent company was 2.556 billion yuan, the EPS in 22 / 23 was adjusted from 1.23/1.57 yuan to 1.22/1.73 yuan, the EPS in 24 years was 1.96 yuan, and the share price of 16.3 yuan on April 21, 2022 was 14 / 10 / 9x respectively, Maintain the “buy” rating.
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, raw material price fluctuation risk and intensified industry competition risk.
