In the first half of 2021, the company realized an income of 7.573 billion yuan, an increase of 53% over the same period last year; gross profit was about 2.17 billion yuan, an increase of 99% over the same period last year; gross profit margin was 27.9%, an increase of 6.4% over the same period The mother's profit was 646 million, an increase of 259% over the same period last year, mainly due to the sharp increase in urea and other products and the control of their own costs; earnings per share were 0.551 yuan.

Urea turnover rose sharply, and chemical products showed remarkable growth: the company's core urea division increased significantly in the first half of 2021, urea volume and average sales increased by about 8% and 23% respectively compared with the same period last year, and revenue increased by 32% over the same period last year. Gross profit margin increased from 27% to 35%. In response to the standard of urea, the company adjusted the product results to reduce the output of used urea solution in order to allocate more production capacity to urea, so the revenue from used urea was 8% to 200 million less than the same period last year, and the gross profit margin was reduced to 35.8% from 37.6% in the same period. As the average cost of raw materials such as phosphate and fertiliser rose by 64% and 57% respectively, Hefei's revenue increased by 13% year-on-year to 2.35 billion, while the gross profit margin fell from 17% to 15%. High-efficiency fertilizer accounted for more than 50% of fertilizer revenue in the first half of last year. The company's chemical products show a very bright performance. Methanol revenue has increased significantly. The revenue has increased by 355% to 7.3 billion compared with the same period last year, and the gross profit margin has increased from-2.3% to 19.7%. Mainly due to the sharp increase in sales caused by the new methanol production in Jiujiang base and the energy boom, methanol volume and average sales increased by 190% and 57% over the same period last year. The sales of dimethyl ether, melamine and furfuryl alcohol all increased significantly, driving the increase of sales revenue. We estimate that the purchase of urea and chemicals will continue in the second half of the year.

The Jiujiang base was successfully put into production, and the three major bases spread all over the country: of course, the Jiujiang base was not officially put into production until February 21, but its unique location and technological advantages made it a rapid growth point for the company. As of the first half of this year, the proportion of profit and expenditure of the Jiujiang base reached 40 percent, the highest of the three major bases. with the completion of the construction of the Jiujiang base, the company has formed a strategic situation in which the three major bases help each other to attack the whole country. At the same time, in the second half of the year, with the completion of the technical transformation of the second and third fixed beds in Henan Province and the commissioning of 200,000 tons of oxygen and water supply in the new base, as well as the DMF and high tower towers in Jiujiang Base.

With the commissioning of the Hefei project, the new production capacity will strengthen the driving force for the growth of the company's future revenue.

We forecast that the annual income of the company in 21-22-23 is 144.2 billion yuan, 171.7 billion yuan and 209.4 billion yuan respectively, and the mother profit is 1.26 billion yuan, 1.46 billion yuan and 1.62 billion yuan respectively. Based on our profit forecast for 2021, we have a median valuation of 7 times PE and an upper heading of HK $9.01, maintaining a premium level.