Securities code: Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) securities abbreviation: Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) Announcement No.: 2022053 Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) investment (Guangzhou) Co., Ltd
Announcement on the holding of 2021 annual performance description meeting
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
In order to facilitate the majority of investors to further understand the annual operation of Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) investment (Guangzhou) Co., Ltd. (hereinafter referred to as “the company”) in 2021, the company held a 2021 annual performance briefing on panorama’s “investor relations interactive platform” from 15:00 to 16:30 p.m. on May 20, 2022. For details of the holding of this performance presentation meeting, please refer to the company’s announcement on cninfo.com on May 14, 2022（ http://www.cn.info.com.cn./ ）Announcement on holding 2021 annual performance briefing disclosed on the. The holding of this performance briefing is hereby announced as follows:
1、 The holding of this performance presentation meeting
From 15:00 to 16:30 p.m. on May 20, 2022, Mr. Guo Baichun, chairman of the company, Mr. Ma Yingjun, general manager, Ms. Liu Bingyan, director and deputy general manager and Secretary of the board of directors, and Mr. Su Xuejun, deputy general manager and chief financial officer attended the performance presentation meeting.
At the performance presentation meeting, the company had interactive exchanges with investors on 2021 annual report, operation status, future development strategy and other issues.
2、 The main questions exchanged by investors and the company’s replies in this performance briefing
The company replied to the concerns of investors at this performance presentation meeting. Now the main concerns and replies of investors are sorted out as follows:
Question: what is the current production cost and ex factory price of the factory in Laos after 1 million tons are delivered? Reply: the current unit operating cost of the company is 825 yuan / ton. Up to now, the CFR price in Southeast Asia is 800950 dollars / ton, and the self offered price in Chinese ports is about 5000 yuan / ton.
Question: the content of magnesium chloride in the raw ore mined by your company is 18%. Does the company have a development and utilization plan
Reply: at present, the company has no development and utilization plan for magnesium chloride. Due to the large proportion of magnesium chloride in the company’s raw ore, the company will maintain the research on magnesium chloride with relevant scientific research institutions.
Question: Why are shareholders such as Zhongnong willing to give up their voting rights
Reply: the company is a model for the mixed reform of state-owned enterprises. The advantage of the mixed reform of state-owned enterprises is resource complementarity, which fully combines the resource advantages of state-owned enterprises and the advantages of flexible and efficient market-oriented mechanism. After the change of the board of directors in 2020, with the support of all shareholders and the efforts of the management team, the company successfully implemented the construction and production of the one million ton reconstruction and expansion project in Laos, quickly solved historical litigation cases, and enabled the company to achieve sound development. It highly recognized the management ability of the existing management team; The existing management system and mechanism of listed companies are flexible, which is conducive to the realization of the strategic business objectives of listed companies and the maximization of shareholders’ interests; All parties lack relevant management talents and resource conditions, and have not directly participated in the operation and management of listed companies. Therefore, shareholders such as Zhongnong group recognize the current situation of the company’s management, have no intention to seek the control of listed companies, and voluntarily give up the voting rights of listed companies, which is conducive to ensuring the continuity of the current high-quality management of listed companies, the rapid and effective development of the company’s potassium mineral resources, and the high-quality development and performance improvement of the company’s business.
Question: what are the current difficulties faced by the company
Reply: Hello, affected by China’s epidemic prevention and control policies, it has a certain impact on the efficiency of Chinese purchased materials and materials required for the expansion of the company, the exit of relevant personnel, and the landing and unloading of potash fertilizer products back home. Our company is actively communicating and coordinating with relevant departments to solve the above problems and strive for “green channel” and other support policies.
Question: the company has recently revised the scale of raised funds. Is there any change in the fixed increase price
Reply: there is no change in the scale of the raised funds and the pricing of the issue price. The listed company plans to issue shares to no more than 35 specific investors to raise supporting funds, and the total amount of supporting funds is expected to be no more than 1.68 billion yuan. This issuance is by inquiry, and the issuing price shall not be lower than 80% of the average price of the company’s shares in the 20 trading days before the pricing benchmark date. The pricing benchmark date will be selected after the issuance is approved by the CSRC.
Question: is the impact of the events in Belarus and Russia on the price of potash fertilizer caused by the conflict between Russia and Ukraine? Will the end of the war lead to a sharp decline in the price of potash fertilizer
Reply: ① on the potash fertilizer supply side, Belarus and Russia account for nearly 40% of the world’s production capacity. Affected by the conflict between Russia and Ukraine and the corresponding sanctions, the global potash fertilizer supply will be greatly reduced this year. It is expected that Belarus will reduce production by 6-8 million tons, Russia will reduce production by 2-6 million tons, and potassium will only increase production by about 1 million tons in the second half of this year. The supply side will bring a huge gap, even if the war conflict stops in the short term, However, the European and American sanctions against Russia and Belarus will also last for a long time. Therefore, the global supply of potash fertilizer will be tight in the medium and long term, and the potash fertilizer market will be in short supply.
② On the demand side of potash fertilizer, at present, the global grain inventory is at an all-time low, and the main Shenzhen Agricultural Products Group Co.Ltd(000061) prices have risen sharply, such as soybeans, corn and wheat, which are 50% – 90% higher than the average level in recent 10 years. Affected by the abnormal climate in major grain producing areas in the world and the conflict between Russia and Ukraine, the progress of Shenzhen Agricultural Products Group Co.Ltd(000061) replenishment is not ideal, and it is expected that Shenzhen Agricultural Products Group Co.Ltd(000061) prices will maintain the current high price range. As the Shenzhen Agricultural Products Group Co.Ltd(000061) price is enough to cover the cost increase caused by the price rise of upstream agricultural products, farmers have high planting ability, the willingness to apply chemical fertilizer is guaranteed, and strong support is provided on the demand side of chemical fertilizer.
At the same time, the production base of the world’s major potash suppliers is basically far away from the market consumption area and needs to be transported by land + sea. The substantial increase in energy prices has pushed up transportation costs, further increasing the international CIF (CFR) quotation of potash fertilizer.
In addition, the over issuance of currencies around the world is serious, which has also promoted the long-term high-level operation of potash fertilizer.
Question: why raise the salary of independent directors? What is the background of independent directors? What are the considerations for amending the articles of association and increasing the seats of independent directors
Reply: at present, the company is in the stage of rapid development. At the same time of business development, the company is also trying to optimize corporate governance. The purpose of increasing the allowance of independent directors this time is to encourage independent directors to “be independent and understand” and become more “full-time”, strengthen the performance of supervision responsibilities of independent directors, better help the company and put forward professional opinions, and promote the sustainable and sound development of the company.
At present, the three independent directors of the company are from experts and scholars in the fields of law, audit and macro politics and economy. Please refer to the regular report disclosed by the company on April 2, 2022 for details.
The purpose of the company’s plan to increase the number of independent directors is to further strengthen the guidance and supervision of external directors on the company’s business development, improve the corporate governance structure and help protect the rights and interests of minority shareholders.
Question: how about the production safety in the mine
Reply: at present, the mining area in Laos is located within 80-200m underground. There is no flammable and explosive gas such as gas in the mining process of carnallite mine, and the roadway does not need support. The thickness of the ore bed is uniform and continuous, and the mechanized continuous mining operation mode is adopted. The mining area in Laos also contains potash salt layer, but in order to ensure the safety of mining operation, a certain thickness of potash salt is reserved as the roof of the tunnel, which is not mined. In the process of mining operation, the tunnel will combine with the water vapor in the air to form a hard shell. After more than ten years of exploration and production experience, the company can ensure the safety of mining production.
Question: how to solve the sales problems caused by the improvement of the company’s production capacity, how to expand the current sales channels and how to plan the current and future sales areas. If it is sold to China, will China face the problem of competition with Russian potash fertilizer? What are our advantages over Russian potash fertilizer in China
Reply: in terms of demand: at present, the annual consumption of potash fertilizer in Southeast Asia is about 8-10 million tons. With the process of urbanization and the growth of population, the benefit on crop yield per mu is gradually improved. The compound annual growth rate of potash fertilizer in Southeast Asia is 4%, which is one of the main potash fertilizer consumption markets in the world, and has great growth potential in the future. Supply: potash fertilizer production in Southeast Asia is concentrated in Laos. Except for Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) 1 million T / a potash fertilizer production capacity and Qingdao East Steel Tower Stock Co.Ltd(002545) 500000 T / a potash fertilizer production capacity, Southeast Asia has no other operating capacity. A considerable part of the above 1.5 million tons of production capacity is shipped back to China. Therefore, the supply and demand gap in Southeast Asia is still at least more than 6 million tons. In the future, the company will further expand to more than 3 million tons / year of potash fertilizer capacity, which will not fully meet the potash fertilizer demand in this region.
It turns out that the supply and demand gap in Southeast Asia mainly depends on the imported potash fertilizer from distant oligopoly suppliers such as potash and Russian potash. The Laos factory of our company is located in the middle of Laos and belongs to the center of demand. It has obvious sales location advantages for downstream purchasers. It is convenient for the company to adopt small, zero and fast delivery methods, which is suitable for the purchasing habits of customers in Southeast Asia and has outstanding sales advantages. In addition, the company’s project can also enjoy the policy advantages of Laos as an ASEAN member state and RCEP member state in terms of regional economic and trade environment, import and export and taxation.
Question: what strategic development plan does the company have in the future? Is the development plan related to this reorganization
Reply: after the successful acquisition, the company plans to achieve an output of 2 million tons in 2023 and 3 million tons in 2024. According to the market demand, it will achieve an annual output of 5 million tons from 2025 to 2026.
The development plan is closely related to this restructuring, because the successful restructuring can obtain a capacity license of 2 million tons, which has laid a solid foundation for the realization of production in 2023 and 2024. Otherwise, the company needs to continue to apply for new capacity licenses.
In order to prevent the risk of restructuring, the company applied to the Lao government for a new million ton capacity license in February this year, and strive to obtain an approval by the end of the year.
Question: how long is the estimated construction cycle for the planned 1 million tons next year
Reply: the company plans to achieve an output of 1 million tons by the end of 2022, 2 million tons in 2023 and 3 million tons in 2024. Through agent construction, the company has started the construction of the second one million tons and the third one million tons.
Question: can lithium be extracted from the company’s potassium fertilizer products and by-products
Reply: Hello, the proportion of lithium in the company’s mineral deposits is low, so it has no mining value at the current technical level.
Question: what is the proportion of powdered potassium and granular potassium in the company’s products at present
Reply: in 2021, the proportion of powdered potassium and granular potassium is about 8:2. At present, we plan to increase the proportion of granular potassium.
Question: will the increased production capacity in the future have an impact on Southeast Asia
Reply: it will not have an impact on Southeast Asia.
The company is located in the demand center of potash fertilizer in Asia. Its sales not only radiate Southeast Asia, but also sell to markets such as China, East Asia and South Asia. The total annual consumption of Southeast Asia, South Asia and East Asia is about 33 million tons, and the annual net import is more than 20 million tons. According to the calculation of relevant departments, the annual compound growth rate of the above regions is about 4%, and the annual demand increases by about 1 million tons, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) the increased production capacity will not have an impact on the above areas.
Moreover, Belarus and Russia account for 40% of the international potash market. At present, affected by the conflict between Russia and Ukraine, the supply of potash fertilizer in Belarus and Russia is limited, and there is a large supply gap in the market.
Question: is the demand and price of potash fertilizer in Malaysia, Indonesia and other countries significantly higher than that in China? Has the company considered radiating Malaysia and Indonesia to increase production capacity
Reply: up to now, the CFR price in Southeast Asia is 800950 US dollars / ton, and the self offered price in Chinese ports is about 5000 yuan / ton. At present, the company’s sales scope has covered Malaysia and Indonesia.
Question: if the byproduct of potassium salt can be fully and effectively used to produce bromine, how much bromine can one million tons of potassium fertilizer produce
Reply: Hello investor, one million tons of potassium fertilizer can produce 10000 tons of bromine.
Question: the company has no actual controller, how to ensure normal operation and development stability
Reply: the general meeting of shareholders, the board of directors, the board of supervisors and the management of the company perform their respective duties. Three meetings and one layer structure, build a corporate governance organization with “scientific decision-making, strong implementation, effective supervision and standardized operation”, and vote on important matters by democratic decision-making. The board of directors, the board of supervisors and the management of the company perform the functions of strategic decision-making, discipline supervision and operation management respectively, and carry out corporate governance objectively, fairly and transparently on the premise of mutual checks and balances in accordance with their functions and powers. The major shareholders of the company unanimously recognize the strategic objectives of the company’s main potash industry development and future continuous capacity expansion, fully trust the operation and management ability of the existing management team and provide support, which is conducive to maintaining the stability of the company’s operation.
Question: Dear yako executives, what is the pricing standard for the spring ploughing supply agreement signed between your company and China and the subsequent sales agreement of potassium fertilizer back feeding China? Assuming that the sales price in Southeast Asia is higher than that in China, will your company give priority to selling to Southeast Asia
Reply: Hello, at present, the pricing of all sales contracts of the company is based on the market. When the company formulates the sales market strategy, on the one hand, it considers the responsibility of the enterprises returning home to ensure supply, and at the same time, it also prepares for the market layout after expansion in the future. Question: what is the reason for this rejection? Can the reason for rejection be solved at the second meeting
Reply: the reason why it was rejected at the last meeting is that the CSRC has great uncertainty about the scheduled production and operation of the underlying assets after the transaction is completed.
At present, the uncertain factors of whether it was rejected or not have been basically eliminated. The company’s first million ton project reached production capacity at the end of March and passed the 3 72 hour production capacity verification of a third-party organization. The construction capacity of the company’s large-scale production expansion has been fully verified and its profitability has been further improved. After the acquisition of mine 179, a potash fertilizer production capacity of 2 million tons / year will be built in the follow-up. If the potash available in the listed company is fully utilized
