Overview of events
Recently, Xiamen Dongfang Yinxiang Oil Co., Ltd., a subsidiary of the company, signed a "technical development contract" for the project of extracting potassium chloride from seawater of 200,000 tons per year with Hebei University of Technology and Professor Yuan Junsheng's team. on the basis of the company's existing potassium ion adsorption technology, eluent circulation technology and energy management technology reserve, give full play to the latter engineering construction design experience and technical advantages. Accelerate the industrialization path design and engineering design of the first phase of 200,000 t / a seawater extraction potassium chloride project, and carry out related preparatory work for the construction of intelligent chemical plants.
Analysis and judgment:
Strengthen the cooperation between schools and enterprises and promote the industrialization of potassium extraction from seawater
Deeply ploughing the agricultural field for nearly 15 years, the company pays close attention to the innovative development of the upstream and downstream of agriculture, and actively carries out R & D cooperation. According to the news of China Securities Network on January 29, the company has recently made the extraction of potassium from seawater as one of the key projects. According to the report, the company's R & D team has made a key breakthrough in the core technology of potassium ion seawater separation through a series of experiments, which is currently in the pilot stage. The results of the continuous laboratory data monitoring since December 2021 are much higher than the industry-related literature comparison data. now the results are expected and are expected to meet the requirements of industrialization transformation. Recently, the company's holding subsidiary signed a "technical development contract" for the 200,000 t / a potassium chloride extraction project with Hebei University of Technology and Professor Yuan Junsheng's team. on the basis of the company's existing potassium ion adsorption technology, eluent circulation technology and energy management technology reserve, give full play to the latter engineering construction design experience and technical advantages. Accelerate the industrialization path design and engineering design of the first phase of 200,000 t / a seawater potassium chloride extraction project, and carry out the preparatory work for the construction of relevant intelligent chemical plants to promote the industrialization of the project as soon as possible. The company's seawater potassium extraction technology to achieve industrial production has taken another key step forward.
The gap of potash fertilizer is huge, and the market prospect of extracting potassium from seawater is broad.
Potash fertilizer is an irreplaceable basic fertilizer for agricultural planting. The application of potash fertilizer can promote crop photosynthesis, promote crop fruit and improve crop cold resistance and disease resistance, thus increasing agricultural yield. The main varieties of potash fertilizer include potassium chloride, potassium sulfate, potassium dihydrogen phosphate, potassium nitrate and so on. The distribution of global potash resources is relatively concentrated. According to the data released by the US Geological Survey (USGS) in 2022, the global potash recoverable reserves (K2O) is more than 3.7 billion tons by 2020, of which Canada, Russia and Belarus have reserves of 750 million tons respectively. China's potash reserves are 350 million tons, accounting for 9 per cent of the world's potash reserves. Although China's potash ranks fourth in the world, its per capita reserves are scarce, and China is a large agricultural country with high demand for potash, long-term shortfall of potash and high dependence on imports. According to the data of the National Bureau of Statistics, from 2017 to 2020, China imported 753 million tons of potassium chloride. In the case of limited potash reserves, import is the main direction to make up for the domestic gap, which also means that the market prospect of extracting potassium from sea water is broad.
The prosperity of the planting industry chain is high, and the demand for potash fertilizer is improving.
In the 14th five-year Plan, the state has raised food security to a strategic height, and this year's Central Committee document No. 1 has once again emphasized the issue of food security, and the planting industry has improved in demeanor. The recent geopolitical conflicts have affected food exports on the one hand and heightened the world's concerns about food supply on the other. Food prices continue to rise and countries' demand for food reserves is also rising. The rise in grain prices has led to the enthusiasm of growing grain, and the demand for potash fertilizer continues to improve. According to Wind data, as of March 28, 2022, the domestic spot price of potash fertilizer was 4920.00 yuan / ton, up 125.69% from the same period last year, and 29.13% this year. Potash demand continues to improve, while the company cooperates with Hebei University of Technology and Professor Yuan Junsheng to promote the landing of the business of extracting potassium from 200000 tons of seawater, superimposed planting industry chain continues to thrive, driven by many factors, the company is expected to achieve a simultaneous rise in volume and price in potassium chloride business, and the profit margin will be further thickened.
Investment suggestion
Considering the accelerated industrial production of the company's seawater extraction potassium chloride business, the factory will increase the company's revenue and profits after it is completed and put on the market, we maintain the company's revenue forecast of 16.279 billion yuan for 21-22, keep the net profit forecast for home at-1.418 billion yuan, and increase the company's revenue to 20.85 billion yuan in 2023 (the previous value is 19.7 billion yuan). The net profit will be raised to 1.574 billion yuan (the previous value is 934 million yuan). To sum up, we estimate that from 2021 to 2023, the company's EPS will be-0.38 pound 0.42 yuan, corresponding to the closing price of 3.43 yuan per share on March 29, 2022, and the PE will be-8.99 pound 14.63 pound 8.09X, respectively, maintaining the company's "overweight" rating.
Risk hint
The risk of price fluctuation of agricultural products, the risk of policy disturbance, and the lower-than-expected risk in the industrialization process of potash production.