Event description
On August 25, the company released its half-yearly report on 2022. 2022H1 realized revenue of 11.115 billion yuan, an increase of 18.89% over the same period last year, realized net profit of 1.665 billion yuan, up 129.53% over the same period last year, and realized net profit of 1.317 billion yuan, up 110.54% over the same period last year.
The results in the first half exceeded expectations, focusing on the three main business sectors
The company's three main products contributed well to the performance, and the profits rose sharply in the second quarter. The company's 2022Q2 achieved revenue of 5.59 billion yuan in a single quarter, a decrease of 3.40% over the same period last year, a net profit of 1.027 billion yuan, an increase of 100.11%, an increase of 60.88%, and a non-return net profit of 720 million yuan, an increase of 53.99% and 20.61% over the same period last year. The substantial increase in the company's performance is mainly due to the continuous improvement of the prosperity of the chemical and fertilizer industries during the reporting period, the high market price of the company's main products urea and diammonium phosphate, and the company actively grabs the favorable market situation to ensure the efficient and stable operation of the plant. Product sales revenue increased year-on-year.
The prosperity of the chemical fertilizer industry continues, and the chlor-alkali chemical industry is expected to reach the bottom. Global food prices continue to rise, and the tight balance between supply and demand makes the prosperity of chemical fertilizer continue to rise. Under the continued impact of the epidemic, international food trade has been reduced, and countries have increased food support policies to boost the demand for chemical fertilizer. at the same time, the global policy of quantitative easing has led to a rise in commodity prices for fertilizer production, and the prices of nitrogen, phosphorus, potassium and sulfur have been rising. Fertilizer prices continue to run high. At the same time, the sown area of crops in China is increasing year by year, and the state carries out supply-side reform for the overcapacity industry, removes the excess capacity in the industry, optimizes the supply pattern, and opens up new incremental space for the chemical fertilizer industry. Due to the depressed demand in the downstream real estate market, PVC prices have fallen sharply, in the later stage, new infrastructure, talent rental housing subsidies and other real estate support policies will boost PVC demand, and the overall market will improve.
Layout of new energy materials, biodegradable plastic projects, cooperation with downstream strong and strong cooperation to optimize the product structure of new energy materials project construction steadily, opening the second growth curve. In 2021, the subsidiary company Yifei Fertilizer Co., Ltd. and Ningbo Bangpu, a subsidiary of Ningde Times, jointly established "Bang Popularization" (35% of which is owned by Yifei Fertilizer Industry), responsible for construction projects such as iron phosphate, nickel sulfate and supporting raw materials. Ningde Times announced in October 2021 that it plans to invest 32 billion yuan to invest in the construction of Bang-Pu Integrated Battery material Industry Park in Yichang City, Hubei Province, of which the total investment of Bang Popularization supporting raw materials and ferric phosphate project is about 10.4 billion yuan. it is expected to increase the production capacity of 300,000 tons / year iron phosphate precursors and 200,000 tons / year nickel sulfate, and is expected to be put into production by the end of 2023. After successful production, the company will open up new growth space in the field of new energy. At the same time, the company cooperates with Stanley to carry out the construction of iron phosphate precursor project, with a total design capacity of 200000 tons of iron phosphate, which is expected to be put into production in 2024. The 550000-ton aminoalcohol relocation project is expected to be put into production by the end of 2023. 460,000 tons of liquid ammonia and 90,000 tons of methanol will be added, and about 20,000 tons of sulfuric acid will be produced. The PBAT project with an annual output of 60,000 tons of degradable materials has been completed and is expected to be put into production by the end of 2022. The company's new energy materials and biodegradable plastics project progressed smoothly, opening the second growth curve.
Investment suggestion
It is estimated that the company's net profit from 2022 to 2024 will be 28.81,35.60 and 4.055 billion yuan respectively, an increase of 83.6%, 23.6% and 13.9% over the same period last year. The corresponding PE was 6, 5 and 4 times, respectively. Cover for the first time, giving a "buy" rating.
Risk hint
(1) the progress of project production is not as expected.
(2) the price of raw materials fluctuates greatly.
(3) risk of related policy changes.
(4) International trade risk.