The company released its first quarterly report for 2023, achieving revenue of 998 million yuan, an increase of 64.07% over the previous year, net profit of 158 million yuan, an increase of 52.11% over the previous year, after deducting net profit of 157 million yuan from non-Gumo, an increase of 53.43% over the previous year.
Phosphating chemical industry is booming, and its performance increased in the first quarter. Benefiting from the relatively high boom in phosphate ore, monoammonium phosphate, and calcium dihydrogen phosphate, the company's performance increased in the first quarter. According to Baichuan, the tax-inclusive average prices of calcium dihydrogen phosphate (feed grade) and industrial grade monoammonium phosphate wet method in southwest China and Hubei in the first quarter were 4133 (YoY -0.35%, QoQ -4.65%), 3318 (YoY +9.06%, QoQ +4.57%), 1027 (YoY +53.07%, QoQ +3.71%) yuan/ton, respectively. In addition, the company added iron phosphate sales in the first quarter, which brought a certain increase in the company's performance.
There are plenty of ongoing projects, and continuous implementation has contributed to increased performance. New projects continue to contribute to increasing performance. Since 2022, the company's “Fuquan City New Mineralized Integrated Phosphorus Resource Deep Processing Project - 1.5 million t/a Medium and Low Grade Phosphate Mine Comprehensive Utilization Beneficiation Equipment and Supporting Facilities” project, “300,000 tons/year pyrite sulfuric acid production project”, “200,000 tons/year half-water-dihydrate wet phosphoric acid and deep processing project” front-end wet phosphate production line and the “100,000 tons/year iron phosphate project” have been built and put into use successively. The operation of these projects has increased the company's self-sufficiency rate, rich raw materials. Product types, helping companies move from traditional phosphorous chemicals Shifting to new energy battery materials. At the same time, the company plans to build 120,000 tons/year of food-grade phosphoric acid, 100,000 tons/year of food-grade purified phosphoric acid, 2.5 million tons/year of Jigongling phosphate ore. It is expected that the implementation of these projects will further improve the company's industrial chain layout, expand phosphate mining capacity, guarantee the supply of important raw materials, and lay a solid foundation for the company's long-term growth.
The first coverage gave an “increase in holdings” rating. The company is a leader in the phosphorus chemical industry segment and has abundant phosphate reserves. As the project's growth is gradually reflected, the company is expected to achieve operating income of 37.36, 49.99, and 6.806 billion yuan in 23-25, with net profit of 674, 857, and 1,219 billion yuan. The corresponding PE is 17X/14X/10X, giving it an “increase in holdings” rating.
Risk warning: product prices are declining, and project commissioning falls short of expectations