Event: the company released its semi-annual report of 2022, with operating income of 1.587 billion yuan in the first half of 2022, an increase of 57.77% over the same period last year, and a net profit of 371 million yuan, an increase of 254.08% over the same period last year. Q2 realized operating income of 978 million yuan in a single quarter, an increase of 58.18% over the same period last year, an increase of 60.73% from the previous quarter, and a net profit of 267 million yuan from the previous quarter, an increase of 277.75% over the same period last year and 156.01% from the previous year. Q2's quarterly results hit an all-time high.
The sharp rise in the price of phosphate rock and phosphorus chemical products has led to a big increase in the company's performance:
1) the sharp rise in phosphate rock and phosphate chemical prices is the main reason for the company's second-quarter performance compared with the previous quarter. Taking 30% grade phosphate rock as an example, the average price of Q2 in 2022 was 829 yuan / ton, up 93% from the same period last year and 30% higher than Q1.
Calcium dihydrogen phosphate, the core product of the phosphorus chemical product terminal company, is used as aquatic feed, and its export is not restricted by legal inspection. Under the better supply and demand pattern and the company's strong pricing power (more than 40% market share of Sichuan Heng), the price of calcium dihydrogen phosphate of Q1 company is 3881 yuan / ton, and the average price of Q2 is 5800 yuan / ton. the product price and price difference expand obviously. At the same time, the company added the sales of phosphoric acid products to new energy enterprises, achieving an operating income of 169 million yuan in the first half of 2022, which also led to an increase in the company's performance compared with the same period last year.
2) Fulin Mining, a 90% equity subsidiary of the company, has a phosphate rock production capacity of 3 million tons, with an operating income of 395 million yuan and a net profit of 179 million yuan in the first half of the year. In the first half of the year, the parent company realized operating income of 1.351 billion yuan and net profit of 368 million yuan. After deducting the long-term equity investment income of 144 million yuan (from Fulin Mining dividend) calculated by cost method, the net profit was 224 million yuan. Then consider the contribution of calcium dihydrogen phosphate and phosphoric acid products from Sichuan base (subsidiary Chuanheng Ecology, the specific net profit is not specifically disclosed in the semi-annual report). We estimate that the total profit of phosphate ore + chemical industry in the first half of the year should be more than 400 million, and the difference with the actual return net profit is mainly reflected in the increase in inventory. The company's inventory in the first half of 2022 was 505 million yuan, a substantial increase of 151 million yuan compared with the first quarter.
3) the gross profit of the company in the first half of the year was 41.53%, and the net profit was 24.10%. The sharp increase over the previous year was mainly due to the injection of phosphate rock assets and the widening price gap of phosphorus chemical products.
4) in the first half of the year, the company expense rate was 11.27%, of which management expenses increased by 33 million yuan, mainly including equity incentive fees of 20 million yuan, and R & D expenses increased by 15 million yuan, an increase of 109% over the same period last year. This is mainly due to the increase in new R & D projects in the transformation of the company and the increase in staff salaries and material costs.
Profit forecast and investment rating: we expect the company's 2022-2024 net profit to be 9.0,14.1 and 1.83 billion yuan respectively, corresponding to 16.1,10.2,7.9 times PE respectively, firmly optimistic about the transformation of the company's lithium phosphate fluoride new energy materials, with large room for growth, maintain the "buy" investment rating, and continue to be strongly optimistic.
Risk tips: downstream demand is lower than expected, the progress of project construction is not as expected, and the intensification of competition leads to a drop in product prices.