Company overview: the fast-rising potash rookie company is a rookie in the potash industry, focusing on overseas potash mining, potash production and sales business. The company has a total of 263.3 square kilometers of potash mining area in Ganmeng Province of Laos in Southeast Asia, and the total net reserves of potassium chloride are more than 1 billion tons. A total of 5 million tons / year potassium chloride capacity is planned, of which the existing capacity reaches 2 million tons / year, the capacity under construction is 1 million tons / year, and the proposed capacity is 2 million tons / year. In recent years, the company has expanded its production capacity at the rate of "adding one million tons a year", far exceeding that of the international mining giants and is known as "potassium sulfite speed". The second million-ton project was built particularly quickly, which took only 10 months and is known as the "potassium sulfite miracle".
Potassium Chloride: a highly concentrated Resource Monopoly Industry
Potassium is one of the three main nutrient elements (nitrogen, phosphorus and potassium) necessary for plant growth. The chemical fertilizer containing potassium is called potash fertilizer, and potassium chloride is the main variety of potash fertilizer. Potash fertilizer is mainly used in agricultural production, the demand is scattered, and there is more demand in large agricultural and populous countries. Potash fertilizer comes from natural potash mines. Due to the uneven distribution of natural resources, about 60% of the world's potash fertilizer comes from Canada, Russia and Belarus. The supply is highly concentrated and the supply side has strong bargaining and pricing power.
China is rich in salt lake resources in the northwest, but China is also a large agricultural and populous country, with a high demand for potash fertilizer, a potash self-sufficiency rate of about 50%, and a high degree of dependence on imports. The salt lake area is ecologically fragile and the potassium resources in the salt lake are limited. Since 2016, the production capacity of potassium chloride in China has not been expanded for many years, and the production capacity has remained stable. The contradiction between supply and demand is prominent, and the central government encourages Chinese enterprises to go out to sea to look for potassium.
Potash mining is difficult, there are few successful enterprises in China to look for potash at sea, and the expansion plans of overseas mining giants are often postponed, cancelled and suspended indefinitely. After 2023, the global industry plans to put into production a total of 7.35 million tons / year of potassium chloride, a discount of 4.56 million tons / year, or about 11.4% of 40 million tons. The supply increment is limited, and the supply pattern of the industry may remain stable. Since the conflict between Russia and Ukraine, the traditional potash logistics routes of Russia and Belarus have been interrupted, the cost of potash transportation has increased significantly, and the industry cost curve has risen.
Two bright spots of the company: high execution + cost advantage
High execution. Potash has a large number of offshore projects but few successes, and its high executive ability may be one of the important reasons that make the company stand out.
The company's current management team has a strong problem-solving ability, removing many obstacles hindering the company's production expansion, and leading the company to rapidly expand its production capacity at the rate of "adding one million tons a year". The company's capacity expansion has far exceeded that of the international mining giants.
Cost advantage. The time, the earth and the people are favorable, which makes the company's potash fertilizer cost depression, and the company's production cost is significantly ahead of its peers. Timeless: the history of mining rights currently held by the company can be traced back to 2010, and it was acquired in Laos when the approval of mining rights was lax. considering the scarcity of resources, it will be difficult for competitors to obtain similar low-cost mining rights in the future. Location: the company is located in both shallow burial depth and high bromine content. The buried depth of potash ore vein in Ganmeng province of Laos is obviously shallower than that in Canada and Russia, so there are advantages in fixed investment and mining cost. Laos potash mine is rich in bromine, which can be used to extract bromine to thicken profits. Renhe: the company has the ability of independent R & D innovation, continuous R & D innovation, so that the company's production cost is obviously ahead of competitors with the same resource endowment.
Investment advice: cover for the first time and give a "buy" rating
The company specializes in potash mining, potash fertilizer production and sales business, outstanding in China's overseas potassium enterprises. The potash industry is an oligopoly with highly concentrated supply, and the supply increment is limited in the future. The company has the core competitiveness of low production cost, as the company's new production capacity has been put into operation, the company's performance center is expected to rise. It is estimated that the company's vested net profit in 2025 is 13.92 billion yuan, respectively, which is 2.350 billion yuan. Cover for the first time, giving a "buy" rating.
Risk hint
1, the risk of potash price fluctuation; 2, the risk of production safety; 3, the risk of mining rights not being approved; 4, the risk that the project schedule is not as expected; 5, the risk that the profit forecast hypothesis is not valid or not as expected.