Important chemical fertilizer production enterprises in China. The company is mainly engaged in the production and sales of diammonium phosphate, compound fertilizer, cement, bromine and so on. Among them, the chemical fertilizer business is the company's main business, accounting for more than 60% of the business income, the company has created a "ammonium phosphate-sulfuric acid-cement co-production", seawater "one water multi-use" and other green chemical industry chain.

To create a new product of chemical fertilizer, the profit of bromine is stable. As the company's traditional diammonium phosphate and compound fertilizer products can no longer meet the labor-saving, time-saving and labor-saving fertilization requirements of farmers, the company has added new varieties on the basis of the original production facilities and equipment, such as diammonium humate, diammonium zinc humate, humic acid compound fertilizer and multi-variety mixed fertilizer products, in order to meet the needs of the market and create differentiated products on the basis of ensuring product quality and stability. The appearance and packaging of the products are designed and improved, which improves the market competitiveness of the company's products and the economic benefits of the products. Bromine is one of the important chemical raw materials, which is widely used in flame retardants, fire extinguishing agents, refrigerants, photosensitive materials, pharmaceuticals, pesticides, oil fields and other industries. Because bromine is a state-controlled product, the gross profit margin of the product is high and the profit is stable. 2015 company bromine gross profit margin of 40.98%, is the company's highest gross profit margin product, as of June 2016, the company sold 841.48 tons of bromine.

The technology of resource utilization of waste sulfuric acid has achieved success in industrialization. On the basis of the successful experiment of producing sulfuric acid by calcining waste sulfuric acid in 2014, the company further optimized the technological process, process index and operation parameters in 2015, and realized the industrialization of resource utilization of waste acid. The technology has obtained the national patent and charged the waste acid treatment fee. The company disposed of about 70, 000 tons of waste acid in 2015, charging about 14 million yuan more than in 2014. From the original payment of sulfuric acid to the current part of sulfuric acid does not have to pay consideration and then charge a fee. At the same time, after tapping and reforming the gypsum acid plant, the output of the gypsum sulfuric acid plant is also higher than that of the previous year. The successful industrialization of waste acid resource utilization not only greatly reduces the cost of gypsum acid production, but also gives the company a waste disposal subsidy with different prices per ton of waste acid supplier. The reduction of the cost of gypsum acid correspondingly reduces the cost of ammonium phosphate, greatly improves the economic benefit of the plant, and significantly increases the profit space of the product.

Lubei Group to increase capital and shares to introduce strategic investors. The company announced on July 15, 2016 that the work related to the capital increase and share expansion project of the major shareholder Lubei Group has been completed. Lubei High-tech Zone holds 55.5% of Lubei Group's shares, and Jinjiang Group holds 44.5% of Lubei Group's shares.

Profit forecast and investment advice. We estimate that the net profit attributed to the parent company from 2016 to 2018 is 21.69 million yuan, 30.09 million yuan and 31.66 million yuan respectively, an increase of-21.76%, 38.72% and 5.24% over the same period last year, and the corresponding EPS is 0.06,0.09 yuan and 0.09 yuan respectively. In view of the fact that the company's share price is now trading at 151x PE in 2016, which is higher than the average valuation of companies in the chemical fertilizer industry, it covers the temporary suspension of rating for the first time.

Risk hint. The risk of increased market competition; the risk of large fluctuations in raw material prices.