Main points of investment:

The company is a leading enterprise in domestic fine phosphorus chemical industry.

The company is the leading enterprise in the domestic fine phosphorus chemical industry, and its products involve many kinds of phosphoric acid products, such as phosphoric acid, sodium tripolyphosphate, calcium hydrogen phosphate, yellow phosphorus, phosphorus pentoxide and so on.

Non-public offering is conducive to improving the integration of the industrial chain

The acquisition of Leidatan Hydropower Station through a non-public offering is conducive to improving the company's integrated industrial chain of phosphate rock-yellow phosphorus-phosphoric acid-phosphate. But the degree of improvement is limited, the acquisition of expedient electricity accounts for 15% of the company's yellow phosphorus electricity consumption.

The company's resource bottleneck still needs to be released.

The company has a production capacity of 1.1 million tons of phosphate rock, but at present only 240000 tons are mined every year, which only meets 23.5% of the use. if 1.1 million tons can be put into production, it will meet 100%. There is plenty of room for future growth and resource bottlenecks need to be released.

Investment suggestion

We expect the company's EPS to be 0.09,0.21 yuan per share from 2009 to 2011, the closing price is 9.93 yuan on February 5, the static PE in 2009 is 110X, and the dynamic PE in 2010 is 47x. We think this valuation is on the high side in the monetary tightening environment.

Due to the limited growth of the company in 2010, the stock price is currently overvalued and given a neutral investment rating. However, as the company's non-public offering price is 7.89 yuan per share, if the price is about 8 yuan, we think that there are trading investment opportunities.