Qingdao East Steel Tower Stock Co.Ltd(002545) ( Qingdao East Steel Tower Stock Co.Ltd(002545) ) event: the company released the annual report of 2021. During the reporting period, the revenue was 2.782 billion yuan (year-on-year + 4.92%), and the net profit attributable to the parent company was 404 million yuan (year-on-year + 30.77%).
The advantages of two wheel drive are prominent, and the production capacity of potash fertilizer is expected to increase: during the reporting period, the advantages of the company’s steel structure manufacturing and two wheel drive mode of potash fertilizer are prominent: in terms of steel structure business, the company has a perfect structure of leading products in subdivided fields, and its downstream involves many fields such as electric power, new energy, petrochemical industry and civil construction. At the same time, the development ability of the company’s new products, new processes, equipment and tooling is outstanding, During the reporting period, the technological transformation of the production line was continuously accelerated, and the product quality and cost control ability were improved; In terms of potash fertilizer, according to the announcement, Laos Kaiyuan Mining Co., Ltd., a wholly-owned subsidiary, has 141 square kilometers of potash mining rights in Laos. At present, it has a potassium chloride production capacity of 500000 tons / year, with obvious scale advantages. At the same time, it is located in the central region of the world’s largest potash fertilizer consumption market, and the company has outstanding advantages in product quality and transportation cost. According to the announcement, the brand effect of the company has appeared in Southeast Asia during the reporting period, In addition, on December 31, 2021, the “phase I project of 1.5 million ton potassium chloride project (500000 tons) of potassium magnesium salt mine in Gambang Province, Laos” has been fully launched. The construction will be accelerated in 2022. After reaching the production capacity, the production capacity of Kaiyuan potassium chloride in Laos will be increased to 1 million tons / year. In the future, with the gradual increase of potassium fertilizer production capacity, the company is expected to benefit.
The prosperity of the potash fertilizer industry has improved, and Laos has obvious advantages in layout: driven by the reduction of per capita cultivated land and the rapid development of emerging economies in recent years, the global demand for potash fertilizer and other fertilizers has gradually increased, and the product price has continued to rise. In addition, the uncertainty of global potash supply has been increasing since 2022. According to the Wall Street Journal and Argus, Russia and Belarus are the world’s second and third largest potash producers respectively. The conflict between Russia and Ukraine has had a great impact on product transportation and local fertilizer export. At the same time, due to the sanctions of the European Union and the United States in recent years and the restrictions imposed on Belarusian potash transported through Lithuania, At present, the potash supply in Belarus also has great uncertainty. The global distribution of potash resources is extremely uneven, and China’s potash resources are relatively scarce. At the same time, as a large country with population and agriculture, China has a great demand for fertilizer, resulting in the dependence on potash import remaining at more than 50% in recent years. At present, with China’s increasing attention to food security, it is necessary to adopt the methods of potash fertilizer collection and storage and supporting overseas potash bases to ensure its own potash fertilizer supply and food security. Southeast Asia, where the company’s potash business is located, is an area where Chinese enterprises have carried out overseas potassium search earlier. Laos Kaiyuan took the lead in feeding China back in 2014 and is a pioneer in responding to the national potash strategy. According to the announcement, at present, the company has a production capacity of 500000 tons of potassium chloride per year. In addition, there are potassium fertilizer expansion projects under construction. According to the announcement, the production expansion project of 1 million tons will be completed in the next two to three years according to the situation. In the future, with the gradual increase of production capacity, the profitability is expected to be gradually improved.
Investment suggestion: we expect the net profit of the company from 2022 to 2024 to be 839 million yuan, 1.22 billion yuan and 1.42 billion yuan respectively, and give Buy-A investment rating.
Risk warning: the landing of projects under construction is not as expected; The macro environment is less than expected
