Three quarterly report data
From January to September 2010, the company realized operating income of 1.43 billion yuan, and the net profit belonging to the shareholders of the listed company was 90.34 million yuan, and the earnings per share was 0.15 yuan. In the third quarter, the company achieved operating income of 450 million yuan, an increase of 17.35% over the same period last year, and the net profit attributed to shareholders of listed companies was 33.16 million yuan, up 2.86% from the same period last year.
Realize earnings per share of 0.055 yuan. The company's main income comes from the sales of self-produced urea and purchased urea.
The company's performance benefited from the continued rise in urea prices.
The company's profitability increased significantly in the third quarter, which we think is mainly due to the following two factors: on the one hand, urea prices have continued to rise since August, nearly 300 yuan higher than in the first half of the year.
Natural disasters in the first half of the year affected the demand for agricultural fertilizer, making urea prices hit a low point after a brief rise in the first half of the year. Since the beginning of August, the rise in grain purchase prices has stimulated the demand for agricultural fertilizer, and at the same time, as the rise in international grain prices has led to a continuous rise in international urea prices, domestic urea exports have increased significantly. In addition, the rise in domestic natural gas prices has increased the cost of urea by nearly 200 yuan. Urea prices began to rise after August under the influence of demand, export and cost. Although the increase in the price of natural gas has increased the cost of urea in the company, the profitability of the product has been significantly enhanced due to the sharp rise in urea price.
On the other hand, the start-up of the first chemical plant returned to normal. in the first half of the year, due to insufficient gas supply, the first quarter shut down for 70 days, and the output gap was made up by purchased urea. Since the second quarter, the first chemical plant has returned to normal, and the proportion of self-produced urea in operating income has increased. The gross profit margin of self-produced urea is much higher than that of purchased urea, so the comprehensive gross profit margin of the product rose from 11.15% in the first half to 19.06% in the third quarter.
Delayed commissioning of the second chemical plant affects the release of urea capacity
The company's new secondary chemical plant has been in a state of gas shutdown and waiting for production after successfully opening the process. As the temperature may be at a historical low this winter, the demand for civil natural gas will rise sharply, and industrial natural gas will be affected to a certain extent. We expect that the start-up time of the second chemical plant will continue to be delayed.
We believe that urea prices will remain high in the fourth quarter, driven by higher grain purchase prices this year, dealers preparing inventory for next year's spring ploughing, and a significant increase in exports, which will partially absorb the impact of rising costs. We estimate that the gross profit per unit of urea will increase by about 50 yuan compared with the first half of the year under the influence of cost and price. according to the urea production capacity of 600000 tons / year in the first chemical plant, the company's self-produced urea products are expected to contribute 45 million yuan in the fourth quarter.
Expected injection of melamine assets
The company is planning to acquire the controlling shareholder's melamine branch, which has a production capacity of 30,000 tons / year of high-pressure melamine. The injection of this asset is conducive to the extension of the company's industrial chain and thicken the company's performance. At present, the domestic price of melamine is high, reaching 10000 yuan / ton. Due to the strong growth in demand such as downstream wood processing and the cost pressure caused by rising urea prices upstream, we believe that melamine prices can be maintained in the fourth quarter. If the asset can be successfully injected into the listed company this year, it will be able to slightly increase the performance of the company.
Assumptions and profit forecasts
Under the premise of normal operation of the company's No. 1 chemical plant in the fourth quarter, it is estimated that the company's EPS in 2010, 2011 and 2012 will be 0.21 yuan and 0.42 yuan respectively, and the corresponding PE will be 40,20,16 times, maintaining the company's "neutral" rating.