Recently, the 2023 annual reports of listed fertilizer companies have been disclosed. In 2023, the global economic recovery will be sluggish, the restructuring of the industrial chain and supply chain will accelerate, the great power game and regional turmoil will intensify, the complexity, severity and uncertainty of the external environment will rise, and the efficiency of the fertilizer industry will decline significantly due to internal and external factors. Among the 25 listed fertilizer companies in statistics, more than 60% of the company's operating income declined year-on-year, more than 80% of the company's net profit attributable to shareholders of listed companies declined year-on-year, and only 3 companies' operating income and net profit attributable to shareholders of listed companies both rose year-on-year.
In the past year, although the overall performance of the industry has declined, the new trend of the industry can be seen in the annual report of the enterprise. First, the integrated layout of phosphorus chemical head enterprises is gradually strengthening; second, the advantages of resource-based enterprises are further revealed; third, new fertilizers have become an important track for compound fertilizer enterprises to compete; fourth, enterprises are still optimistic about the development potential of the new energy field, and have been transformed to obtain new profit growth points.
Only 3 companies saw year-on-year increases in operating income and net profit
Among the 25 listed fertilizer enterprises in statistics, 16 enterprises experienced a year-on-year decline in operating income, a decrease of 2.28% ~ 36.22%, and the largest decline in enterprises were Zangge Mining, Salt Lake Co., Ltd. and Chuanfa Long Python; 9 enterprises increased their operating income year-on-year, with an increase of 1.75% ~ 25.30%, and the largest increase in enterprises were Chuanheng shares, Batian shares and Potassium International. From the perspective of the net profit attributable to shareholders of listed companies, 21 companies declined year-on-year, with a decrease of 5.56%~2048.86%. Among them, Yangmei Chemical's net profit loss attributable to shareholders of listed companies was 1.366 billion yuan, the largest year-on-year decline, and Chuanjinnuo's net profit loss attributable to shareholders of listed companies was 91 million yuan, which was the company's first loss since its listing, a year-on-year decrease of 126.35%. Only 4 companies increased their net profit attributable to listed shareholders year-on-year, namely Chuanheng shares, Stanley, Batian shares and Jinzhengda. Among them, Patian shares increased the most, by 114.08%, followed by Stanley, with a year-on-year increase of 58.94%. The operating income and net profit attributable to shareholders of listed companies increased year-on-year, and the performance was outstanding. 2023 performance of 25 listed fertilizer companies
As for the reasons for the increase in performance, Stanley said in the report that it mainly comes from the increase in product sales and the expansion of product profit margins. At the same time, the smooth operation and realization of the benefits of the company's new Lihe fertilizer project and Hubei Songzi project can effectively reduce the company's production costs, increase product sales, and improve the company's operating performance. Chuanheng shares said that during the reporting period, the new production units of the companies were put into operation one after another, the production and sales of new products iron phosphate and phosphoric acid, and the inherent product monoammonium phosphate increased year-on-year, and the volume and price of export phosphate rock rose, and the company's main business income increased due to the superposition of multiple favorable factors. The phosphate rock business is a strong "engine" for the growth of Batian's operating income. In 2023, the company's phosphate mining and dressing business will achieve operating income of 389 million yuan, a year-on-year increase of 374.80%, and a gross profit margin of 76.08%. As for the reasons for the decline in performance, Yangmei Chemical said that due to the market environment, the price of the company's main products has decreased significantly compared with the same period last year, and at the same time, affected by the shutdown of the subsidiary Pingyuan Chemical, the impairment of related assets has led to a significant decline in the company's performance. Chuan Jinnuo said in the annual report that in 2023, the company's operation is full of challenges. On the one hand, the international phosphorus chemical market has just experienced an overheated market in 2021 and 2022, entering a downward cycle, with product prices declining rapidly, while the cost of raw materials remains high due to the high market in the previous two years; on the other hand, the purified phosphoric acid put into production by the company in 2022 will be affected by the phased supply and demand adjustment of the new energy industry in early 2023, and the demand will weaken, resulting in a decline in the company's performance. In the phosphate fertilizer sector, Chuanfa Long Python also said that in 2023, the domestic fertilizer-grade monoammonium phosphate market will still be in a state of overcapacity, coupled with the high upstream raw materials leading to high downstream production costs, and the overall prosperity of the industry is low. In the potash sector, during the reporting period, Zangge Mining achieved an operating income of 321,500 yuan of potassium chloride, a year-on-year decrease of 16.16%, and a gross profit margin of 56.20%, a year-on-year decrease of 14.73%. Potassium chloride prices will fluctuate greatly in 2023. In the first half of the year, prices fell due to various factors such as the rise of social inventories, the increase in the supply of potash fertilizer in Belarus, and the decline in the willingness to stock up in the off-season. Zangge Mining said that during the reporting period, the company's average selling price of potassium chloride (including tax) was 2,709.64 yuan/ton, a year-on-year decrease of 28.60%, and the average cost of sales was 1,088.83 yuan/ton, a year-on-year increase of 7.58%.
The integrated layout of the leading enterprises in the phosphorus chemical industry has been gradually strengthened
At the end of 2023, the Ministry of Industry and Information Technology, the National Development and Reform Commission and other eight departments jointly issued the "Implementation Plan for Promoting the Efficient and High-value Utilization of Phosphorus Resources", pointing out that by 2026, the sustainable guarantee capacity of domestic phosphorus resources will be significantly enhanced, the independent innovation ability and green safety level of phosphorus chemical industry will be steadily improved, and the supply capacity of high-end phosphorus chemicals will be greatly improved. Many enterprises have predicted that the leading enterprises with the advantages of industrial chain integration will be in a leading position in the competition pattern of the phosphorus chemical industry in the future. At the same time, enterprises are also enhancing their own integrated layout through a variety of means. Yuntianhua, a leading phosphorus chemical company, has built a relatively complete industrial chain and integrated operation model, which has become one of the significant advantages of the enterprise in the market competition. In recent years, Xingfa Group has promoted the integrated development of phosphorus chemical industry, silicon chemical industry, sulfur chemical industry and fluorine chemical industry, forming an industrial pattern of "resource and energy as the basis, fine chemical industry as the leading, and related industries as the supporting industry". During the reporting period, Chuanfa Lomon continued to consolidate the advantages of "mineralization integration" and actively promoted the upgrading of the stock business industry. At the same time, the company continues to innovate and develop high-end fine phosphate products to enhance the company's market position in the field of fine phosphate segment. In terms of increment, the company is also innovating and upgrading to build a multi-resource green circular economy industrial chain of "sulfur-phosphorus-titanium-iron-lithium-calcium", laying the foundation for the company's sustainable and steady development by extending the chain and strengthening the chain. While consolidating the competitiveness of the existing fields, compound fertilizer enterprises are also actively seeking the integrated development of the upstream and downstream of the industrial chain. For example, Yonfer pointed out in its annual report that the company has formed a competitive advantage in the integration of the industrial chain. At the end of 2023, the company's annual output of 150,000 tons of water-soluble fertilizer and 300,000 tons of slag acid fertilizer project will start trial production, which will further enhance the company's industrial chain integration advantages in the compound fertilizer and new energy materials sector after the project is put into operation. It can be seen that while consolidating the existing main business, the head enterprises are also actively expanding the industrial chain and constantly consolidating the core competitiveness of the enterprises, and the integrated layout of the head enterprises of phosphorus chemical industry is gradually strengthening.
The advantages of resource-based enterprises have been further revealed
In recent years, the ups and downs of raw material prices have become one of the important reasons affecting the market trend, and enterprises with upstream resources are obviously able to cope with market fluctuations. For example, the phosphate rock business has added a strong "engine" to the growth of Patian's operating income. It is reported that Patian shares previously spent 343 million yuan to obtain the prospecting right of Xiaogaozhai phosphate mine in Weng'an County, Guizhou Province, the ore resources of the mine reached 63.92 million tons, and the high-quality mineral resources fundamentally guaranteed the safety, nutrition, environmental protection and stability of Batian's products. At present, the output of Xiaogaozhai mine is further improving, which will provide a more solid resource guarantee for the company's future development, and is expected to bring significant performance growth to Batian shares, and further enhance the company's market competitiveness and profitability. At the same time, with Guizhou's high-quality phosphate rock resources as the origin, Batian Co., Ltd. has further opened up the upstream and downstream, and established a complete industrial chain of phosphate rock, phosphoric acid and iron phosphate. For another example, Asia Potash International currently owns 263.3 square kilometers of potash mining rights in Khammouang Province, Laos, and the reserves of pure potassium chloride resources are expected to exceed 1 billion tons. In January 2023, the company's second 1 million tons/year potash fertilizer project was successfully commissioned. In April 2024, the company's third 1 million tons/year potash fertilizer project was successfully commissioned. At present, the company has become the largest potash fertilizer enterprise in Asia and the largest in Southeast Asia, and has realized the efficient and collaborative development of the two mineral resources, which will help further enhance the company's sustainable development ability and core competitiveness. It can be seen that the leading enterprises continue to enhance their own resource layout, and a solid resource foundation can also help enterprises to exert greater market potential, and then achieve performance growth.
New fertilizers have become an important track for compound fertilizer enterprises to compete
In recent years, with the large fluctuations in bulk raw materials and the continuous tightening of environmental protection requirements, the backward small and medium-sized production capacity is unsustainable, and the concentration of the compound fertilizer industry will continue to increase. The fierce competition will promote the industry towards consolidation, and mergers and acquisitions and cooperation will become the new normal. In the new round of competition, listed compound fertilizer companies are expected to become a new track for enterprises to compete. Yonfer said that the new fertilizer, which focuses on the needs of nutrient improvement, function improvement, reduction and efficiency improvement, quality improvement, soil improvement and environmental friendliness, will have broad market prospects. Batian shares believe that the traditional compound fertilizer production capacity is seriously overcapacity, and the new compound fertilizer will become an important direction for the adjustment and development of the compound fertilizer industry. In the future, high-efficiency and environmentally friendly new fertilizer products represented by slow-release fertilizers, nitro compound fertilizers, water-soluble fertilizers, microbial fertilizers, etc., will develop rapidly, which is the direction of structural adjustment and upgrading of the compound fertilizer industry. Kingenta also said that the structure of compound fertilizer products has changed to specialization, high efficiency, precision and functionalization, and green and efficient new compound fertilizer products have developed rapidly, especially focusing on new fertilizers such as improving quality and increasing yield, biological control and soil health, etc., and the market consumer group will continue to expand and have great development potential. In 2023, the increase in new fertilizers has significantly become one of Yonfer's annual performance highlights. It is reported that the sales volume of Yonfer's new fertilizer will increase from 335,600 tons in 2016 to 1,122,600 tons in 2023, an increase of 234.51% in 7 years, with a compound annual growth rate of 18.83%, and the sales revenue of new fertilizers will account for 24.27% of operating income in 2023, an increase of 3.85 percentage points over 2022. While upgrading existing products, Stanley continues to develop and launch new products to meet market demand, such as adding a variety of synergistic additives to the water-soluble fertilizer product. In terms of new product research and development, new breakthroughs have been made in 2023, mainly in organic fertilizers and stable fertilizers. In the future, the development momentum of new fertilizers is rapid, and listed fertilizer companies are expected to be the commanding heights of large-scale compound fertilizer enterprises, especially leading enterprises. Yuntu Holdings emphasized that the leading enterprises have strong R&D strength, technology and resource support, and their advantages will become more and more obvious in the future competition.
Actively lay out the new energy track
In recent years, the continental iron phosphate and lithium iron phosphate industries have shown explosive growth, and the transformation of phosphorus chemical enterprises into new energy has become a boom. However, affected by the rapid expansion of production capacity and the sharp fluctuation of lithium carbonate prices, the market competition in the iron phosphate industry is becoming increasingly fierce, the downstream operating rate is insufficient, the product price continues to fall, and the market is gradually cooling. However, judging from the annual reports of enterprises, many enterprises are still optimistic about the future development momentum of the new energy field, and regard it as a new direction for enterprise transformation and upgrading, creating a new growth curve. Yuntianhua pointed out that phosphorus-containing new energy materials are an important direction for the development of phosphorus industry. At present, the situation of phased overcapacity, fierce cost-price competition and inconsistent quality demand faced by market capacity will continue for a period of time. However, with the continuous growth of the demand for new energy industry and energy storage, the demand for related materials will continue to increase, and the product standards will be gradually improved and unified in the process of industry development, the industry pattern will tend to be stable, and enterprises with resource advantages, technical advantages and market advantages will have more development potential. With the acceleration of the marketization process of the new energy vehicle industry and the gradual maturity of the energy storage industry, under the premise of the growing demand for lithium iron phosphate materials, iron phosphate is bound to usher in explosive growth demand and broad market prospects. Chuanheng also said that the scale of the new energy vehicle market in mainland China is gradually expanding, and iron phosphate will become one of the important downstream markets of phosphorus chemical industry in mainland China. In this regard, Chuanheng Co., Ltd. has formulated a development plan of "based on phosphorus and higher than phosphorus, transforming new materials", and the company is committed to becoming a leading enterprise of iron phosphate for batteries in the world. In the next five-year strategic plan, Chuanjinnuo has also clarified the strategic goal of "becoming an excellent supplier of new energy materials with deep coupling of electrochemistry and phosphorus chemical industry". Chuan Jinnuo pointed out that the phosphorus chemical sector is still a core business of the company, and the electrochemical sector is the key development direction of the company in the future.
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Please indicate in the following format for reprinting: Source: Agricultural Resources Herald Author: Ding Jiahui Editor: Chen Ran Review: Zhai Yiting Producer: Zheng Hongyan