Core viewpoints
The industry is declining, and the company's short-term performance is under pressure: the company achieved 2.355 billion in revenue in the first three quarters of 19 years, up 7.42 percent from the same period last year. Affected by the sharp decline in the phosphate fertilizer boom in the second half of the year, revenue growth declined significantly compared with the first half of the year. In the first three quarters, net profit reached 200 million, an increase of 7.70 percent over the same period last year, but only 103 million was deducted, down 41 percent from the same period last year. Among them, Q3 achieved revenue of 949 million in a single quarter, down 2.21% from the same period last year; the net profit of returning to the mother was 98 million yuan, an increase of 16.41% over the same period last year, and only 14 million yuan was returned to the mother after deduction, down 83.37% from the same period last year. The non-recurrent profit and loss in the first three quarters mainly came from 98 million yuan of income from the disposal of non-current assets brought about by land acquisition and storage compensation. The company is affected by the decline of phosphate and compound fertilizer in the short term, and its performance is under obvious pressure.
The advantage of the industrial chain is increasing: for the two core elements of phosphorus and compound fertilizer, phosphorus and sulfur, the self-sufficiency ability of the company is increasing. At present, the company's own capacity of 300000 tons of phosphate rock in Guizhou Zhengli has been expanded to 400000 tons, and the company also owns a 20% stake in Guizhou Lufa. In the future, after its exploration rights are converted into mining rights, the self-sufficiency capacity of phosphate ore will be further enhanced. The company has 380000 tons of pyrite mining conditions, after putting into production will further reduce the company's pyrite procurement, enhance the company's pyrite sulphuric acid competitiveness. In addition, the mining of zinc, lead, copper, silver and other metals in pyrite is expected to further enhance the company's profitability. In the process of the continuous improvement of the advantages of the industrial chain, the company is expected to maintain strong competitiveness even at the bottom of the industry boom, and achieve a rebound in product gross profit margin.
Financial forecasts and investment suggestions
Due to the decline in product prices, we forecast that the company's earnings per share in 19-21 will be 0.40,0.47,0.51 respectively (the original forecast for 19-20 years is 0.50,0.58). According to the comparable company's 19-year price-to-earnings ratio of 17 times, we will give the target price of 6.80 yuan and maintain the buy rating.
Risk hint
The product boom is not as expected, and the risk of raw material price fluctuation.
