Event: on the evening of July 11, the company issued a preview of its 2022 half-year results. In the first half of 2022, the company is expected to achieve a net profit of 3.6-430 million yuan, an increase of 244.0% to 310.8% over the same period last year, and is expected to deduct a net profit of 3.6-430 million yuan, an increase of 299.4% and 377.1% over the same period last year. In 2022, Q2 company is expected to achieve a net profit of 2.6-330 million yuan, an increase of 262.7%, 361.9%, and 145.9%, 213.1%, respectively.
The price of phosphorus chemical industry and phosphate rock continued to rise, and the performance of 22Q2 company increased greatly. Benefiting from the high prosperity of the phosphorus chemical industry, the prices of 22Q2's main phosphorus chemical products and phosphate rock have increased significantly. According to Baichuan Yingfu and iFinD data, 22Q2 domestic calcium dihydrogen phosphate, monoammonium phosphate and phosphate rock prices increased by 87.8%, 57.9% and 74.6% respectively compared with the same period last year, and increased by 45.4%, 29.3% and 22.0% respectively compared with the same period last year. In addition, on the sales side, the company has entered a normal state of production and sales since the end of maintenance at the beginning of April, and the sales volume of 22Q2 products has increased greatly compared with 22Q1. On the cost side, the company's 3 million tons / year phosphate rock production capacity can fully meet the production needs of existing products, thus offsetting the cost pressure caused by the rising price of phosphate ore for raw materials. At the same time, in the 2022 convertible bond project of Q2 Company, 1.5 million tons / year of mineral washing capacity and 300,000 tons / year pyrite sulphuric acid production capacity have also been completed and put into production, further improving the company's self-sufficient ability to produce raw materials and further improving the supporting facilities in the upper reaches of the industrial chain. In addition, the previous fixed increase investment projects in the traditional phosphorus chemical products end company will be completed and put into production in the second half of 2022, which will bring new production capacity such as calcium dihydrogen phosphate, phosphoric acid purification, anhydrous hydrogen fluoride and so on.
The planning of new energy materials has been gradually landed, and the reserve of phosphorus, fluorine and lithium resources is complete. Up to now, the company has jointly planned 1.6 million tons / year iron phosphate production projects with partners such as Guoxuan Group, Xinwanda and Fuquan Municipal people's Government, which are expected to be completed and put into production during the period from 2022 to 2026. Among them, the first batch of 100,000 tons / year iron phosphate production capacity is expected to be completed and put into production in June-July 2022. In terms of phosphorus resources, the company's overall phosphate mineral planning can reach 10 million tons, discount rights and interests of about 8 million tons / year. In terms of fluorine resources, relying on the semi-aqueous wet-process phosphoric acid production technology with independent intellectual property rights, the company can make full use of phosphate rock associated fluorine resources and transform them into anhydrous hydrogen fluoride and downstream products with more production value. At the same time, the company has also established a joint venture company engaged in lithium hexafluorophosphate business with Guoxuan Group and Xin Wanda. In terms of lithium resources, in May 2022, the company jointly established Zhejiang Jin Hengwang Lithium Industry Co., Ltd. (14% owned by the company) with Jinyuan and Xinwangda. Zhejiang JinHengwang plans to integrate related lithium resources around Argentine salt lakes.
Earnings forecast, valuation and rating: benefiting from the sharp increase in the price of phosphorus chemical products and phosphate rock, the company's Q2 performance increased significantly in 2022, which was basically in line with expectations. We maintain the company's homing net profit forecast for 2022-2024, and estimate that the company's homing net profit for 2022-2024 will be 8.25 billion RMB 14.71 billion respectively.
We continue to follow the progress of the company's capacity planning for new energy materials such as iron phosphate and maintain its "buy" rating.
Risk tips: product and raw material price fluctuations, capacity construction is not as expected, downstream demand is not as expected.