Events:
On October 28, 2022, the company released the third quarterly report of 2022: in the first three quarters of 2022, the company achieved operating income of 2.456 billion yuan, + 46.93% year-on-year; net profit of 589 million yuan, + 178.13%; and the weighted average return on net assets was 14.87%, an increase of 7.99 pct over the same period last year. The gross profit margin of sales was 45.15%, an increase of 13.66 pct; sales net profit margin of 24.91%, and an increase of 11.51 pct; operating activities cash flow of 178 million yuan over the same period last year.
Among them, Q3 achieved revenue of 869 million yuan in 2022, + 30.56% year-on-year,-11.15% month-on-month; net profit of 219 million yuan, + 103.98%,-64.27%, 5.37%, up 2.40 pct and 1.62 pct, respectively. The gross profit margin of sales was 51.76%, up 13.18 pct from the same period last year, the net sales profit rate of 6.34 pct; was 26.38% higher than the previous month, the net sales profit rate was 9.08% higher than the same period last year, and the cash flow of 1.84 pct; business activities was 175 million yuan lower than the previous month.
Main points of investment:
The performance of the company is growing rapidly, and the phosphate rock continues the boom.
In 2022, the company's Q3 achieved operating income of 869 million yuan, year-on-year + 30.56%, month-on-month-11.15%; net profit of 219 million yuan, + 103.98%, month-on-month-64.27%.
Since the third quarter, the prices of major raw materials such as sulfur and synthetic ammonia have dropped rapidly from high levels, and the prices of the company's main products, such as calcium dihydrogen phosphate and monoammonium phosphate, have also dropped from high levels, but they are still higher than the price level in the same period last year. According to Baichuan Yingfu, the average price of Q3 industrial-grade monoammonium phosphate in 2022 was 6623 yuan / ton, up 27.63% from the same period last year, down 8.16% from the previous year; and the average price of calcium dihydrogen phosphate was 4752 yuan / ton, up 22.02% from the same period last year and down 21.09% from the previous year. The contradiction between supply and demand of phosphate rock still exists, continuing the boom. The average price of Q3 phosphate rock in 2022 was 1035 yuan / ton, an increase of 66.29% over the same period last year and 30.64% higher than the previous month.
From the raw material end, according to wind data, the average price of Q3 sulfur in 2022 was 1380 yuan / ton, down 21.11% from the same period last year and 62.69% from the previous year; the average price of synthetic ammonia was 3465 yuan / ton, down 17.28% from the same period last year and 25.41% from the previous year; and the average price of phosphate rock was 1035 yuan / ton, up 66.29% from the same period last year and 30.64% from the previous month. Since the third quarter, the prices of the company's main raw materials, such as sulfur and synthetic ammonia, have declined rapidly, but the price of phosphate rock has remained high. The company has its own phosphate rock, with cost advantage, Q3 gross profit margin level increased month-on-month in 2022.
In terms of period expenses, the sales / management / financial expense rates of 2022Q3 Company are 1.38%, 7.02% and 1.50%, respectively, compared with the same period last year.-3.12/-0.34/-0.76pct, month-on-month ratio + 0.26, "1.70," 0.58 pct. The company's R & D projects and R & D investment increased, and the R & D expenditure rate was 2.65%, year-on-year + 1.00pct, month-on-month + 0.70pct.
The amount of phosphate ore resources is further expanded, and the advantage of orebody integration is obvious.
With the continuous exploitation of phosphate rock resources and their non-renewability, the price of phosphate rock may remain high.
In 2021, Fulin Mining, a subsidiary of the company, has completed the acquisition of mining rights and related assets of Xinqiao Phosphate Mine and Jigongling Phosphate Mine. Fulin Mining has three mining rights: Xiaoba phosphate Mine, Xinqiao Phosphate Mine and Jigongling Phosphate Mine. The company has its own phosphate rock to meet the needs of production, and the surplus phosphate ore will be exported to enhance profitability. In June 2022, Fulin Mining, a subsidiary of the company, obtained the notice of Guizhou Provincial Natural Resources Department on approving the registration of mining rights in Xiaoba phosphorus Mine of Guizhou Fulin Mining Co., Ltd. The mining depth of Xiaoba phosphate mine changed from 1392 m to 1000 m to 1392 m to 700m, the inflection point of mining area remained unchanged, and the production scale expanded from 500,000 tons / year to 800,000 tons / year. In Xiaoba phosphate mine, the total phosphate ore reserves were found to be 30.0784 million tons in the range of quasi-mining elevation and 17.6569 million tons in the range of expanded boundary elevation. The change of mining rights expands the company's phosphate ore reserves, increases the production scale of phosphate rock, further improves the self-sufficiency rate of the company's phosphate ore, and strengthens the advantage of industrial chain integration. The company's existing phosphate rock production capacity of nearly 3 million tons / year, in the construction capacity of Jigongling phosphate rock 2.5 million tons / year and the shareholding company Tianyi Mining 5 million tons / year.
New energy projects continue to move forward, opening up new space for the company's growth.
The company continues to promote the transformation of new energy. On June 24, the company announced that Huaguan New Energy, a new joint venture subsidiary of Guoxuan Hi-Tech, will jointly invest in lithium hexafluorophosphate research and development, production, sales and technical services. The company announced on September 16 that Hengyue New Energy 100000 tons / year battery iron phosphate project has been put into trial run successfully. In addition, the company actively promotes the 200,000 t / a half-water-dihydrate wet-process phosphoric acid and deep processing project in Pengyue, Guangxi, which is expected to be completed by the end of December 2022, of which the wet-process phosphoric acid plant was put into operation on August 31. According to data from the China Automotive Power Battery Industry Innovation Alliance, from January to September 2022, China's cumulative 116.3GWh of lithium iron phosphate batteries accounted for 60.1 percent of the total, an increase of 159.8 percent over the same period last year. The company's products in the iron phosphate industry chain are becoming more and more perfect, and it is expected to benefit from the rapid development of the new energy industry and open up a new space for growth.
Profit forecast and investment rating
The company has obvious advantages in orebody integration and will benefit from the rapid landing of new energy projects. It is estimated that the net profit in 2024 is 8.12,11.85 and 1.791 billion yuan respectively, the EPS is 1.66,2.43,3.67 yuan per share, and the corresponding PE is 13,9,6 times, maintaining the "buy" rating.
Risk hint
Macroeconomic fluctuation risk; capacity investment is not as expected; raw material price fluctuation risk; future demand decline; new project schedule is not as expected; non-public offering process uncertainty risk.