Event description
On the evening of October 27, 2023, the company released its third quarterly report in 2023, with revenue of 13.703 billion yuan in the first three quarters, down 15.26% from the same period last year, and net profit of 390 million yuan, down 81.87% from the same period last year. Of this total, 2023Q3 realized revenue of 4.607 billion yuan, down 8.87% from the same period last year, and improved 5.25% from the previous year; the net profit from home was 138 million yuan, down 71.66% from the same period last year, and 326.37% from the previous year.
The prices of Q3 main products bottomed out and rebounded. After the improvement of gross profit in July this year, the prices of PVC, urea and diammonium phosphate gradually rebounded, and the company's Q3 performance improved from the previous month. Affected by the traditional off-season and inventory accumulation, the price of the company's main products remained depressed from May to July, and the company's performance in the second quarter was under pressure. with the preparation of fertilizer in autumn and the removal of the industry, prices gradually bottomed out in July. Urea with the outbreak of phased agricultural demand, downstream take the opportunity to stock, inventory began to digest from the end of May, to July inventory has been at a historically low level, supporting the rise in urea prices. Diammonium phosphate prices also began to rebound from the end of July in the context of domestic autumn stockpiles and rising overseas prices. According to Baichuan data, the quarterly average prices of 2023 Q3, diammonium phosphate / urea / PVC/ caustic soda are 3446.38x2404.19x5896.88x3418.66 yuan / ton, respectively, with a month-on-month change of-2.99 / + 5.08 / + 4.56pm 4.72%. The price of the main product shows an upward trend, making the company's third-quarter gross profit margin and performance improved, 2023 Q3, 12.64% gross profit margin and improved 2.54pct.
The prosperity of the chemical fertilizer industry continues, and the new production can be put into production in an orderly manner to help the company upgrade the global fertilizer boom, and the new project will be put into production soon. At present, the domestic diammonium phosphate market is in the demand transition period of autumn fertilizer preparation and winter storage market, and the export price of diammonium phosphate remains high. At present, it is the Rabi fertilizer season in the Indian Peninsula, and the superposition of geographical conflicts aggravates concerns, and the prosperity of the chemical fertilizer industry is expected to continue. In 2021, the subsidiary company Yifei Fertilizer Industry and Ningbo Bangpu, a subsidiary of Ningde Times, jointly established "Bang Puyi" (35%), adding 300,000 tons / year iron phosphate precursor production capacity and 200,000 tons / year nickel sulfate production capacity. It is expected that it will be put into trial operation at the end of 2023. After it is put into production in the future, the company will open up new growth space in the field of new energy. At the same time, the technical renovation and relocation project of 550000 tons of ammonia and alcohol is expected to be put into production by the end of 2023. after the completion of the project, 460,000 tons of liquid ammonia and 90,000 tons of methanol will be added to provide matching for the supply of synthetic ammonia, methanol and other products and heat in the park. Shares in Jiangjiadun 1.5 million tons of phosphate rock are expected to be exploited and put into production next year. As the price center of the main business stabilizes and new production capacity and new projects are put into production one after another, the company's performance still has room for growth in the future.
Investment suggestion
Due to the price pressure of the company's main products PVC and diammonium phosphate this year, the company's net profit from 2023 to 2025 is expected to be 6.29,9.32 and 1.368 billion yuan respectively, with year-on-year growth rates of-70.9%, 48.1% and 46.8% respectively. The corresponding PE was 17, 12 and 8 times, respectively. Maintain a "buy" rating.
Risk hint
(1) the progress of project production is not as expected.
(2) the price of raw materials fluctuates greatly.
(3) risk of related policy changes.
(4) International trade risk.