Core point of view
Single-quarter profit continues to maintain a high level: according to the announcement of the third quarterly report, 2021Q3 achieved a revenue of 3.309 billion yuan, almost the same as the same period last year, and realized a net profit of 387 million yuan, compared with the same period last year. + 92.4% pint 2021Q3 realized revenue of 1.158 billion yuan in a single quarter,-14.4% compared with the same period last year,-16.3% compared with the same period last year, and realized a net profit of 135 million yuan, + 100.5% and-16.8%, respectively. The magnificent demeanor of the chemical fertilizer industry continues to support the company's single-quarter profits at a historically high level.
The high boom adjustment of products and raw materials has helped the company grow steadily: the domestic price of monoammonium phosphate rose from 1835 yuan / ton in early October 20 to the highest price of 3550 yuan / ton in mid-August this year, an increase of 93%. Although the price of monoammonium has gradually dropped due to subsequent raw material price adjustments, it is still at a historically high level of about 3000 yuan / ton. The company has obvious advantages in integration, with a gross profit margin of 27.45% in the first three quarters, an increase of 9.8pct over the same period last year, and a net profit rate of 11.60%, an increase of 5.47pct over the same period last year, fully benefiting from the upward profit growth brought about by the industry boom. We believe that the decline in Q3 performance month-on-month growth rate is mainly due to seasonal factors, as well as the previous price rise, enterprise shipments are positive, so the month-on-month slightly slowed down; but the company's integrated supporting advantages are gradually improved, still withstand the upward pressure of raw materials.
Rely on the advantage of resources to enter the new energy materials track: the company announced in September that it intends to cooperate with Rongjie Group and AVIC Trust to develop phosphate rock resources and build lithium iron phosphate and iron phosphate production capacity. On the one hand, the company plans to transfer part of the equity of Guizhou Lufa Phosphate Mine to Rongjie Group and jointly develop and exploit it; on the other hand, it plans to jointly invest 2 billion and 1.5 billion to build 50, 000 tons of lithium iron phosphate and 100000 tons of iron phosphate production capacity. The technical and channel capabilities of Fujie, combined with the company's own supporting resources, will provide a guarantee for the landing and profitability of the project in the future.
Financial Forecast and Investment suggestion
Based on the principle of prudence and objectivity, the contribution of new energy materials will not be considered for the time being. Due to the significant increase in the prices of compound fertilizer and monoammonium phosphate this year, the price and profitability of the company's products have been significantly improved. Therefore, we raise the product price and predict that the company's net profit for 21-23 years will be 537 million yuan (323 million yuan for 21-22). According to the 21-year comparable company's average price-to-earnings ratio of 21 times, the target price is 12.6 yuan (the original target price is 7.20 yuan). Maintain the buy rating.
Risk hint
The product boom is not as expected, and the risk of raw material price fluctuation.
