Recently, the first quarter report of listed fertilizer companies has disclosed that affected by market conditions, among the 25 companies in statistics, 80% of the company's operating income and net profit attributable to shareholders of listed companies in the first quarter fell year-on-year. Among them, the decline in operating income was 3.23%~55.28%, and the decline in net profit attributable to shareholders of listed companies was 0.96%~327.98%. Only 2 companies achieved both operating income and net profit attributable to shareholders of listed companies, namely Hualu Hengsheng and Chuan Jinnuo. Among them, the net profit attributable to shareholders of listed companies increased by 412.33% year-on-year.
On the whole, the decline in corporate performance is mainly due to the decline in sales prices and sales volume caused by market fluctuations, while the increase in performance is mainly due to the new development momentum increased by new projects and new development directions.
Nitrogenous fertilizer:
Only one company's revenue and net profit both rose
Judging from the performance of 7 listed companies based on nitrogen fertilizer, only Hualu Hengsheng achieved both operating income and net profit attributable to shareholders of listed companies, 6 companies experienced a decline in operating income, with a decline of 3.23% ~ 41.1%, and 5 companies attributable to shareholders of listed companies with a decline of 17% ~ 327.98%. Among them, Yangmei Chemical suffered a loss, with the largest decline.
Note: The operating figures of XLX are comprehensive revenue and consolidated net profit, and have not been audited
The decline in product prices is one of the important reasons for the change in corporate performance. Yangmei Chemical pointed out that the average sales price of urea during the reporting period was 1985.97 yuan (ton price, the same below), and the average sales price in the same period last year was 2425.12 yuan, a year-on-year decrease of 18.11%.
In the first quarter of 2024, the domestic urea market will show a "fall-rise-fall" trend due to the impact of high Nissan, slowing demand and reduced exports, but the increase is not as good as the fall, and the overall performance is a downward trend. In the second quarter, the domestic urea production capacity is still expected to increase, the supply side remains high, while the cost of raw materials has declined, the start of compound fertilizer is weak, and the market is expected to remain weak.
Under the overall weak situation, the construction and commissioning of some new projects are also bringing new momentum to the development of enterprises. After the first phase of Hualu Hengsheng Jingzhou project was successfully put into operation, the product sales volume during the reporting period increased compared with the same period last year, which became the main reason for the company's performance increase. At the same time, Hubei Yihua is also actively promoting the implementation of the project, promoting transformation and upgrading, and improving quality and efficiency. During the reporting period, the Hubei Yihua fund-raising project, namely the clean coal pressurized gasification polygeneration technical transformation and relocation and upgrading project, reached the predetermined usable state, which can further reduce the company's comprehensive cost and further guarantee the supply of raw materials.
Phosphorus Chemicals:
The new transformation brings new momentum to the enterprise
In the first quarter, the performance of phosphorus chemical enterprises was differentiated. Among them, the performance of Chuan Jinnuo is particularly outstanding, the company achieved operating income of 581 million yuan, a year-on-year increase of 11.76%, and the net profit attributable to shareholders of listed companies was 20.379 million yuan, a year-on-year increase of 412.33%. The net profit of other enterprises in the statistics declined to varying degrees year-on-year, with a decline of 7.18%~31.09%.
In the first quarter of 2024, the phosphate fertilizer industry performed weakly under multiple pressures, and prices generally declined. According to the statistics of Zhuochuang Information, as of March 31, the average market price of 55% of the domestic monoammonium phosphate (phosphate fertilizer) in the first quarter was 3,084 yuan, down 7.43% month-on-month and 7.14% year-on-year, and the average market price of 64% diammonium phosphate was 3,895 yuan, down 0.74% month-on-month and 4.33% year-on-year.
However, Yuntianhua is optimistic about the phosphate fertilizer market. The company pointed out at the performance briefing that in the near term, the phosphate fertilizer industry has been affected by the increase in the demand for high-quality phosphorus resources for phosphorus-based new energy battery materials and the industrial transformation of related enterprises, and the supply of standard diammonium phosphate has been significantly reduced, and the supply and demand of diammonium phosphate, the main agricultural application products, have maintained a tight balance, and the domestic spring market has maintained a high degree of prosperity this year. Powdered monoammonium phosphate follows the procurement rhythm of downstream compound fertilizer manufacturers, and the price fluctuates. At the end of April, the domestic spring ploughing phosphate fertilizer season is coming to an end, and the industry has turned into the export season. At present, the overall demand orders in the international market are sufficient, and although the price has decreased compared with the first quarter, it still maintains a premium to the domestic market. It is expected that phosphate fertilizers, especially diammonium phosphate standards, will maintain a good market prosperity throughout the year.
In the past, the layout of phosphate fertilizer enterprises in the field of new energy batteries has become a boom, but at present, due to the overcapacity of the market, the new energy field has not brought considerable profits to related enterprises. Yuntianhua pointed out that the company's first phase of 100,000 tons/year iron phosphate project has been completed and put into operation, but due to the impact of external factors such as the market downturn, it will not be profitable in 2023. However, the company still believes that the new energy battery material industry such as iron phosphate and lithium iron phosphate is an important development area of the phosphorus chemical industry and an important strategic direction of the company. At present, the industry is facing problems such as fluctuations in market competition pattern, rapid iteration of technology, and differentiation of product quality indicators, which are also necessary processes for the rapid development of the industry.
The transformation of the new track provides a new idea for the development of phosphorus chemical enterprises. In order to cope with the impact of the gradual release of industrial purified phosphoric acid production capacity in the domestic market, and at the same time give full play to the technical advantages of the company's food-grade phosphoric acid and the location advantages of Guangxi Fangchenggang subsidiary, Chuanjinnuo took the initiative to explore the overseas food phosphoric acid market, and the production and sales gradually shifted to food-grade phosphoric acid. Thanks to this, the net profit of Chuanjinnuo in the first quarter increased by more than 4 times year-on-year. As of December 2023, the company's food-grade purified phosphoric acid has exceeded 70% of the overall production capacity.
Potassium fertilizer:
The decline in sales volume and price led to a decline in corporate performance
In terms of potash fertilizer, among the four listed potash fertilizer companies, in addition to the operating income of Oriental Tower, which increased by 13.85% year-on-year, the operating income of Zangge Mining, Salt Lake Co., Ltd. and Potassium International all declined year-on-year, with a decrease of 55.28%, 42.12% and 25.89% respectively. The net profit attributable to shareholders of listed companies of the four companies declined to varying degrees compared with the same period last year, with a decline of 0.96%~75.82%. Among them, the decline of Oriental Tower was the smallest, and the decline of Asia Potassium International was the largest.
The decline in both sales and prices of potassium chloride has become one of the important reasons for the decline in corporate performance. During the reporting period, the output of potassium chloride of Salt Lake was about 1,123,500 tons, and the sales volume was about 764,300 tons. In the same period of 2023, the company's potassium chloride production will be about 998,100 tons, and the sales volume will be about 1,248,200 tons. During the reporting period, Zangge Mining achieved a year-on-year decrease of 18.71% in potassium chloride output of 158,600 tons, and a year-on-year decrease of 62.88% in potassium chloride sales of 139,600 tons. Zangge Mining pointed out that the sales price of potassium chloride products decreased by 31.89% and the selling price of lithium carbonate products decreased by 77.36% during the reporting period.
Looking back on the operation of the potash fertilizer market in the first quarter of 2024, with the gradual activity of the spring ploughing market, the domestic supply of potash fertilizer has increased significantly, especially the supply of imported potassium has jumped significantly compared with the same period last year, and the port inventory has been running at a high level. Salt Lake pointed out in the report that without considering the port carryover, the import volume of new orders in the first quarter reached a record 3.64 million tons, compared with 2.56 million tons in the same period last year, an increase of more than 30%. On the demand side, although the overall domestic potash demand in the first quarter was basically flat or slightly increased compared with the same period last year, the start of terminal demand was delayed due to the dual impact of sufficient supply and declining nitrogen fertilizer prices. On the whole, there has been a phased mismatch between supply and demand in the market, and prices have shown a gradual downward trend. This has led to a cautious attitude on the downstream demand side when purchasing, mainly to digest inventory and control the risk of price loss.
Although the performance of potash fertilizer enterprises has declined to a certain extent, the promotion of key projects of enterprises has made significant progress. Salt Lake Co., Ltd. launched a new 40,000 tons/year basic lithium salt integration project, with an estimated project investment of 7.098 billion yuan. Up to now, the company has completed the design optimization and preliminary procedures, and the overall project is progressing normally as planned. Zangge Mining Tibet Ma Mi Co Project has completed the site selection of production workshops, early land leveling, and road construction in some mining areas, and the company is currently promoting the handling of mining rights for the project in an orderly manner.
In recent years, potash fertilizer in Laos has become an important part of China's overseas potassium search. Zangge Mining's potash project in Laos is also accelerating. As of the end of the reporting period, Zangge Mining's Vientiane Potash Project in Laos has completed major exploration work in the two mining areas of Pakistan and Russia and Setani. Zangge Mining Laos Project Company has submitted the "Potash Exploration Results Report" in the Pakistan-Russia mining area to the Department of Geology and Mineral Resources of the Ministry of Energy and Mineral Resources of Laos, and submitted a written application for convening a review meeting. Zangge Mining expects that the company will pass the review and obtain the resource record certificate in the near future.
However, it is worth noting that in 2023, Laos issued Presidential Decree No. 001 "Presidential Decree of the Lao People's Democratic Republic on the List of Export Goods and Tariff Rates", and the Lao government will levy export tariffs at a rate of 7% for potassium chloride exports from October 1, 2023. At present, Asia Potassium International has received a reply letter from the Department of Planning and Investment of Khammou Province on the "Policy on Export Tariffs and Related Taxes for Potash Fertilizer Products in Khammou Provincial Industrial Park". According to the current tax law of Laos, the company has accumulated export tariffs of 91.7251 million yuan (including 47.1846 million yuan in 2023 and 44.5405 million yuan from January to March 2024) and 11 million yuan in shareholder dividend tax. Asia Potassium International pointed out that the Khammou Provincial Planning and Investment Department said that it had negotiated with relevant ministries and commissions on the company's application for exemption from potash export tariffs and shareholder dividend tax, and basically supported the company's application after consultation with relevant ministries and commissions and had reported to the government.
Looking forward to the future market of potash fertilizer, entering April, potash fertilizer prices have risen, the industry believes that potash fertilizer ports still continue to arrive, coupled with the relatively slow speed of destocking, the market wait-and-see mentality has not dissipated. The second quarter is the off-season for domestic potash fertilizer market demand, and the domestic potash fertilizer carry-over inventory is large, especially after the national reserve potash fertilizer is put into operation at the end of April, the spot supply may continue to be loose, further weakening the market's confidence in price support. The trend of the potash fertilizer market in the future needs to pay attention to the domestic agricultural demand market, the production dynamics of compound fertilizer enterprises, and the signing trend of overseas potash fertilizer contracts.
Compound fertilizer:
Revenue declined across the board
In the first quarter, the operating income of major compound fertilizer listed companies declined compared with the same period last year, with a decline of 8.51%~27.73%. Except for Stanley and Kingenta, the net profit attributable to shareholders of listed companies increased, and the net profit of the rest of the enterprises decreased compared with the same period last year. Among them, Kingenta's net profit turned losses into profits, with a year-on-year increase of 166.79%, and the net profit of Liuguo Chemical fell the most, reaching 65.38%.
In view of the reasons for the decline in performance, Liuguo Chemical pointed out that it was mainly due to the combined impact of the decrease in product sales and the decline in selling prices in the current period. Yonfer believes that the decline in the company's operating income is due to the fluctuation of raw material prices and the impact of the temperature in Northeast China in mid-to-early March being 10°C lower than the same period last year, and the stocking of downstream channels is delayed compared with the same period. Yuntu Holdings believes that the decline in the company's operating profit is mainly due to the year-on-year decline in compound fertilizer and yellow phosphorus gross profit in the reporting period.
In the first quarter, the trend of the domestic compound fertilizer market was dominated by the following lines. According to Longzhong information statistics, the average price of domestic compound fertilizer in the first quarter was about 2,906 yuan, down 1.76% month-on-month and 10.72% year-on-year. As of the end of the first quarter, the average domestic price of 45% (15-15-15) sulfur-based compound fertilizer was about 2,815 yuan, down 6.94% from the beginning of the year. On the whole, the prices of major raw materials for compound fertilizer in the second quarter are expected to decline, which will weaken the support for the cost of compound fertilizer. At the same time, the international market is sluggish, and it is difficult for exports to drive the domestic market. Some domestic fertilizer products also have new production capacity released in the second quarter, and the supply is more relaxed, so market price competition is unavoidable. However, the prices of raw materials are currently at a low level, the decline is decreasing, and there is rigid demand in the market, so the downward adjustment of compound fertilizer prices in the second quarter will be narrowed.
Circulation of agricultural materials:
Both revenue and net profit declined
Affected by market conditions, the operating income and net profit attributable to shareholders of listed companies in the field of agricultural material circulation, Tianhe shares and Huilong shares, both declined. The operating income of Huilong Co., Ltd. decreased by 12.21% year-on-year, and the net profit attributable to shareholders of listed companies decreased by 29.75% year-on-year, and the operating income of Tianhe Co., Ltd. decreased by 16.97% year-on-year, and the net profit attributable to shareholders of listed companies decreased by 40.58% year-on-year. Huilong Co., Ltd. pointed out that due to the downward trend in fertilizer market prices and the market downturn, the company's fertilizer sales scale and gross profit margin decreased year-on-year during the reporting period, resulting in a year-on-year decline in the company's operating performance. It is worth noting that during the reporting period, the inventory of Tianhe shares was 3.918 billion yuan, a year-on-year increase of 56.63%.
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Please indicate in the following format for reprinting: Source: Agricultural Resources Herald Author: Ding Jiahui
Editor: Ding Jiahui Review: Chen Guoxing Producer: Zheng Hongyan