Core views

The company achieved revenue of 14.73 billion yuan in Q3, -18.5% year-on-year and 18.8% month-on-month; net profit to mother of 1.58 billion yuan, +54.2% year-on-year and +14.6% month-on-month. Among the company's main products, sales of phosphate fertilizer and compound fertilizer declined slightly year-on-year, while others remained flat. In terms of profit, the price spread for the main products in Q3 mixed, and the widening price spread of phosphate fertilizer contributed to an important increase. Looking ahead to Q4, high levels of international phosphate fertiliser+domestic phosphate deposits are gradually entering the rest season and winter reserves, and industry sentiment is expected to remain relatively high; in the medium to long term, the phosphate ore boom is expected to last longer than expected, and the company's 5% dividend ratio is highly cost-effective.

occurrences

The company released its quarterly report for the year 24. In Q3, the company achieved revenue of 14.73 billion yuan, -18.5% year-on-year, and -18.8% month-on-month; net profit to mother of 1.58 billion yuan, +54.2% year-on-year, and +14.6% month-on-month.

Brief review

Q3 gross margin increased by 3 pct month-on-month, and the phosphate fertilizer export price spread widened sharply. Among the company's main products, sales of phosphate fertilizer and compound fertilizer declined slightly year on year, while others remained basically the same. In terms of profit, Q3 price spreads of ammonium phosphate, compound fertilizer, urea, yellow phosphorus, and calcium hydrogen phosphate were +0, -60, -31, +755, and -201 yuan/ton, respectively, with mixed ups and downs. On the export side, the Q3 diammonium FOB - domestic price difference increased sharply by 452 yuan/ton to 586 yuan/ton, compounded by the loosening of export policies, contributing to an important increase in Q3 profits.

Also, due to the company's repurchase of minority shares in Phosphate Group at the end of Q2, there was a significant increase in the company's return to mother in Q3. Q3 The company's minority shareholders' equity fell to 0.092 billion yuan, -0.005 billion yuan year-on-year, and -0.247 billion yuan month-on-month.

Phosphate mining remains booming, and the company's dividend rate is about 5%

Although phosphate ore currently corresponds to a wave of capital expenditure peaks, the difficulty of mining new mines, the depletion/exhaustion of old mines, and policy restrictions have all disrupted the supply and demand of phosphate ore to a certain extent. The new supply of phosphate ore may be slower than expected in the next two years, and the high level of phosphate ore is expected to maintain. The company's dividend for 23 years is 1.82 billion yuan, which corresponds to the current dividend rate of 4.4%. If it maintains last year's dividend ratio for 24, the corresponding dividend rate for 24 is expected to reach 5.2%. The company's capital expenditure is gradually being reduced, and the company's dividend level is expected to be maintained or even increased in the future.

Profit forecast and valuation: Phosphate mining is expected to maintain, and Zhenxiong phosphate ore will increase the company's growth. The company's net profit for 2024-2026 is estimated to be 54.4.7, 5.756, and 5.972 billion yuan, corresponding PE is 7.9X, 7.4X, and 7.2X, respectively, maintaining a “buy” rating.

Risk warning: raw material prices fluctuate; downstream demand falls short of expectations; phosphate prices fall.