As the industry boom bottomed out and rebounded, the company's performance is expected to continue to grow in the next two years. From 2015 to 2017, the company's EPS is expected to be 0.12,0.17 and 0.24 yuan respectively, and the current share price is 80 times, 59 times and 40 times PE respectively, giving a "recommended" rating for the first time.
15-year performance is expected to increase significantly: the company achieved operating income of 484 million yuan in the first three quarters of 2015, an increase of 13.23% over the same period last year. The net profit was 25.84 million, a substantial increase of 216.52% over the same period last year. The income per share is 0.07 yuan. The company also issued a forecast that full-year net profit in 2015 is likely to increase significantly compared with 2014.
Process improvement, superimposed raw material price drop to improve profitability: the main source of the company's profit growth lies in the significant improvement in the income and profitability of chemical fertilizer products. On the one hand, the improvement of profitability lies in the company's continuous transformation of the process system to further achieve energy saving and cost reduction. The decline in the price of raw materials such as coal also has a positive impact on the company's profitability. In addition, the company shares in Jinan Shizhong Hairong Micro-loan Co., Ltd., holding 15% of the shares and earning dividends.
Controlling shareholders increase their shares to show confidence: Lubei Group increased its shares in the company through the Shanghai Stock Exchange trading system from August 26, 2015 to September 1, 2015, a total of 1.486 million shares, accounting for 0.42% of the company's total share capital, with a total increase of 10.0378 million yuan.
The company's profitability is expected to continue to improve: the company's main business includes chemical fertilizer and salt chemical products, the chemical fertilizer and salt chemical products industry has bottomed out, and the industry is expected to gradually recover from 2016. In addition, the company has been strengthening its brand building and deepening its marketing network in recent years. The rapid growth of fertilizer revenue this year reflects that the company has achieved phased results, and this trend is expected to continue in the future.
Risk tips: the risk of the decline of the industry boom; the risk of production safety.