Core viewpoints
Q3 deducted non-performance increased significantly compared with the same period last year: the company achieved revenue of 3.308 billion in the first three quarters of this year, an increase of 40.48% over the same period last year, 201 million of net profit, an increase of 0.31%, and 187 million of net profit after deduction, an increase of 82.38% over the same period last year. Among them, Q3 achieved revenue of 1.353 billion in a single quarter, an increase of 42.52% over the same period last year; net profit of 67 million, down 31.34% from the same period last year; and 61 million of net profit after deduction, a substantial increase of 343.82% over the same period last year. The reason for deducting the difference is mainly due to the non-recurrent land acquisition and storage income of the company last year, and the substantial growth after deduction in the first three quarters of this year, the performance is more solid and the upward foundation is more solid.
Optimistic about the recovery of phosphate and compound fertilizer next year: due to the sharp drop in the incremental price of sulfur due to high port inventories and refinery production last year, as well as the impact of high domestic phosphate fertilizer stocks in India, phosphate fertilizer began a downward trend in the second half of last year, but we are optimistic about the phosphate fertilizer market next year, and the core is the support of strong demand. Demand in South Asia, represented by India, has increased significantly this year. The acreage of Khariff in India has increased by 39% compared with the same period last year. From January to November, the cumulative sales of diammonium increased by 21% compared with the same period last year. Due to the greatly digested high domestic inventory, coupled with the strong demand from South American countries such as Brazil, international supply and demand has tightened, and the price of the international phosphate fertilizer market has continued to rise since the second half of this year. While USDA predicts that the global grain stock-to-sales ratio will continue to decline, we believe that the recovery in the large cycle of global planting demand next year will continue to support phosphate fertilizer demand growth. And phosphate fertilizer has basically no new production capacity at home, and the new supply overseas is slow. Under the trend of improvement in supply and demand, the cost advantage brought by the matching of the company's industrial chain is expected to surpass the growth opportunities of its peers.
Financial forecasts and investment suggestions
Due to the decline in the prices of compound fertilizer and monoammonium phosphate products this year, we downgrade the company's 20-22 EPS per share to 0.38,0.45,0.56 respectively (the original forecast for 20-21 years is 0.47,0.51). According to the comparable company's 21-year price-to-earnings ratio of 16 times, we give the target price of 7.20 yuan and maintain the buy rating.
Risk hint
The product boom is not as expected, and the risk of raw material price fluctuation
