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【宏源证券】四川美丰:国四时代临近,关注四川美丰

宏源證券 ·  Jan 2, 2014 00:00  · Researches

An increase in the urea boom, the guarantee of low-cost gas sources, and the commissioning of the Mianyang Industrial Park will guarantee a significant increase in the company's performance. First, more than 60% of the company's main revenue comes from urea. After 2 years at the bottom of the industry boom, we expect the trend of urea production limit on the supply side and rising demand on the demand side due to falling export tariffs. Second, as Sinopec's only gas fertilizer company, the company has a great advantage in leading gas supply and cost. Furthermore, the commissioning of the company's nitro compound fertilizer project in Mianyang Industrial Park will add another impetus to growth in performance. Therefore, we believe that the company's performance will improve drastically in 2014, and the margin of safety for stock prices will be high. Country 4 may move from story to reality, and the urea space for cars will be revealed. According to our upstream research, such as Weifu, etc., orders for equipment that consumes automotive urea, began in November-December '13, and it is conservatively estimated that it will increase 4-5 times over the same period last year. The full implementation of the national four diesel vehicles has gradually moved from story to reality. Considering the current increasing environmental protection pressure from local governments and the fuel-saving effects of automotive urea, we anticipate that demand may gradually enter the expansion period. As the supplier with the most channel and production advantages in China, the company's production capacity is fully prepared. In the future, it will clearly benefit from the introduction of the National Four Policy, and both performance and valuation are expected to improve. LNG is gradually getting closer, and expectations may begin in '14. As a subsidiary of Sinopec that was involved in the construction of LNG liquefaction stations earlier, it is currently constructing two liquefaction stations of 1 million m3/day. Among them, the Langzhong project is expected to be put into operation in mid-'15, and the Pakistan-China project is expected to be put into operation in '16. Furthermore, the company actively explores downstream gas stations and other fields, such as the establishment of joint ventures such as Langzhong Shuangrui, etc., to lay the foundation for future sales. The transformation dividend will begin to be released, and investors are advised to focus on it. As the best fertilizer company under Sinopec, Meifeng continues to transform and develop. The direction of transformation is in line with national policy trends. The company has unreplicable advantages with the support of majority shareholders, etc., and it has a management team with competent officers. We continue to be optimistic about the company's development space in the next 2-3 years. In particular, 14 years are expected to enter a critical point where transformation expectations are gradually realized, and investors are advised to focus on it.

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