1. Chengxing shares have a variety of advantages needed by the phosphorus chemical industry.

The company has the resource advantage of more than 120 million tons of phosphate ore reserves; the company's production electricity is guaranteed (the spontaneous power meets the company's yellow phosphorus production of more than 50%) and the cost is low; the company has the advantage of fine phosphorus chemical technology. food-grade phosphoric acid and electronic-grade phosphoric acid may greatly improve the company's performance in the future.

2. Be optimistic about the phosphorus chemical industry in the short, medium and long term

In the short term, the current inflation expectation is the catalyst for the rapid recovery of the phosphorus chemical industry; in the medium term, the implementation of differential electricity prices and the elimination of backward production capacity of yellow phosphorus production by local governments will reduce the effective production capacity of domestic primary phosphorus chemical products. at the same time, it will reduce the periodicity of the industry; in the long run, the national tightening protection policy on phosphate ore resources will bring trend development opportunities to the phosphorus chemical industry.

Based on the above reasons, we can be optimistic about the phosphorus chemical industry in the short, medium and long term.

3. Profit forecast and investment suggestions

It is estimated that the company's EPS in 2010, 2011 and 2012 will be 0.10,0.16 and 0.27 yuan respectively.

From the perspective of PE, the company's stock price is no longer cheap; however, considering that the company has scarce resources, the basic conditions to significantly improve its performance (production capacity and technology of high-grade phosphorus chemical products), and the flexibility of performance in the process of industry recovery may lead to higher-than-expected performance, give a recommended rating.