Yuntianhua (600096) Institutional Research and Investor Q&A Selection (20211101)

Mr. Zhong Dehong, Secretary of the Board of Directors of the Company, interpreted the situation of the third quarter report of 2021.

Question 1: Urea, phosphate fertilizer products prices fluctuate at a high level, international prices continue to rise, domestic and international price differences are large, what are the views on product price trends, market supply and demand?

Answer: At present, the international price of urea and phosphate fertilizer products is higher than the domestic price. With the regulation and control of product prices by the relevant state departments and the implementation of legal inspection policies for product exports, domestic prices may fluctuate up and down on the basis of existing prices. The company will strengthen market research and judgment, and strengthen communication with relevant departments under the premise of fully responding to the domestic fertilizer "supply and stable price" policy, and do a good job in connecting the domestic and international markets. Since the second half of 2021, the price of fertilizer production factors has risen significantly, pushing up production costs, and product prices will remain high. The company's mineralization integration advantages are obvious, which can effectively cope with the impact of the rise of bulk raw materials.

Question 2: Please describe the impact of power rationing in Yunnan on the company.

Answer: Power rationing has no impact on the company's fertilizer production. The company's yellow phosphorus (30,000 tons / year production capacity) production has a certain impact, but the overall scale of the company's yellow phosphorus in the company's main business accounted for a relatively small proportion, will not have a significant impact on the company's performance. With the easing of electricity shortages in Yunnan, the company's yellow phosphorus plant gradually resumed production.

Question 3: Please introduce the capacity and positioning of the company's main fertilizer production base.

Answer: ShuifuYuntianhua has an annual output of 500,000 tons of synthetic ammonia and 760,000 tons of urea; Jinxin Chemical has an annual output of 500,000 tons of synthetic ammonia, 800,000 tons of urea, and an annual output of 3 million tons of coal in coal mines, which is mainly used for the production of synthetic ammonia; Tianan Chemical has an annual output of 500,000 tons of synthetic ammonia, monoammonium phosphate, and diammonium phosphate of 1.92 million tons; Dawei Ammonia has an annual output of 500,000 tons of synthetic ammonia, 430,000 tons of urea and other products, and synthetic ammonia is mainly used for the production of phosphate fertilizer of the company's subsidiary. In addition, the company's subsidiaries Sanhuan Zhonghua, Red Phosphorus Chemical, Yunfeng Chemical and Sanhuan Xinsheng mainly produce phosphate fertilizers; subsidiary Phosphating Group is mainly engaged in phosphate ore mining, flotation and production of phosphoric acid, and Tianning Mining is mainly engaged in phosphate mining.

Question 4: Please tell us about the supply of coal and natural gas in winter.

Answer: In terms of coal supply, the company gives full play to the advantages of the centralized procurement platform, accurately controls the procurement rhythm of bulk raw materials such as coal, expands the coal procurement area, implements strategic procurement, establishes strategic inventory, and mitigates the impact of rising prices of bulk raw materials. In terms of natural gas supply, the company's natural gas supply is mainly affected by civil heating gas, such as a large demand for civil gas in winter, the company's production of natural gas may be affected. The company strengthens communication with the gas supply department, shortens the gas outage time as much as possible, and dynamically arranges the annual overhaul time of the relevant devices to minimize the impact on the basis of fully completing the annual production plan.

Question 5: What efforts has the company made to control costs?

Answer: The company strengthens the control and optimization of the production cost of the main products, the main fertilizer plant operates stably under high load, the production capacity of the device is effectively exerted, and the unit energy consumption and material consumption are effectively controlled. Shorten the overhaul time and cycle of major production plants, improve production efficiency, and reduce inspection and maintenance costs. Through centralized procurement, the procurement cost of bulk raw materials such as coal and sulfur is reduced. Deepen internal reform, strengthen internal assessment, optimize incentive mechanisms, and improve management efficiency.

Q6: Please describe the process and technical route adopted in the new project and the supporting construction of the project.

Answer: The company has resource advantages, cost advantages and technical advantages in the construction of iron phosphate projects. The company has a complete and mature wet phosphoric acid refining technology; is currently building a 100,000 tons of refined phosphoric acid project, the new project also includes an annual output of 100,000 tons of refined phosphoric acid project and an annual output of 200,000 tons of hydrogen peroxide project, which can provide a stable part of the resource guarantee for the company's iron phosphate project, and later according to the development of the industry, it can also dynamically adjust the layout of phosphorus resources in related industries. The new project is located in the Anning Industrial Park, where the company's existing ammonia, phosphate fertilizer, phosphorus chemical and other equipment can be efficiently coordinated with the project in terms of resource supply, public works, safety and environmental protection and recycling. The new project with an annual output of 100,000 tons of iron phosphate in the early stage adopts the current mature and feasible technical route, and at the same time, the company is accelerating the demonstration of other technologies, and selecting a feasible technical route according to the principle of technological maturity and cost efficiency advantages in the later stage.

Question 7: How long is the production cycle of the iron phosphate project?

Answer: The 100,000 tons/year iron phosphate project and supporting facilities project are scheduled to be completed in June 2022, and× the 200,000 tons/year iron phosphate project and supporting facilities project are scheduled to be completed in December 2023. The main uncertainty of the investment cycle lies in the progress of various administrative approvals of the project, and the company will speed up the approvals required for the project, and accelerate the progress of project investment and construction according to the industry situation and technological development.

Question 8: Will the commissioning of the iron phosphate project affect the company's fertilizer production?

Answer: After the project is put into operation, the company's total fertilizer production and product structure will be adjusted and structurally optimized, and at the same time, according to the principle of maximizing the benefits of phosphorus resources, the layout of phosphate fertilizer and phosphorus chemical industry will be dynamically adjusted, and flexible production will be implemented to maximize the company's value.

Question 9: Please describe the source of funding for the construction of the iron phosphate project.

Answer: The company has a good level of operating cash flow, good solvency, and can support project construction through its own funds, project loans, etc. At the same time, diversified financing can also be carried out through the listed company platform in a timely manner.

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Shenwan Hongyuan Song Tao, Ma Xinye, Chen Tao, Zhejiang Merchant Fund Jia Teng, Huabao Fund Jiang Shijiao, Xingshi Investment Xiang Shijie, CITIC Securities Wang Junxian, Ruiyuan Fund Zhong Ming, Changjiang Pension Insurance Ma Rui, CITIC Prudential Fund Liu Rui, Huabao Industrial Fund Jiang Shijiao, CITIC Securities Zhao Fangfang, Ruitian Assets Yang Rongpei, Haitong International Xu Shengdong, Rongtong Fund Sun Weidang, Donghai Asset Management Ma Ziqiang, Ceibus Fund Zhou Yinbo, Chuangjin Hexin Hu Yaosheng, Goldman Sachs Assets Pu Huiqun Christine Pu, Yingda Insurance Xu Wenhao, Yimin Fund Zhang Bo, Anxin Securities Ma Zhengnan, Jiangsu Ruihua Wang Kuangchen, Taiping Assets Sun Shihao, Huashang Fund Wang Daobin, Dunhe Assets Chen Junyuan, Qinyi Investment, New Construction Investment Liang Wanjun, Shanghai Investment Morgan Fund Zhai Xu, Caitong Securities Zhu Qiandong, Huafu Fund Fan Liang, Tongtai Fund Wang Xiu, China Merchants Asset Management Huang Chao, PICC Assets Zhang Xianning, Taiping Asset Zhao Yang, Aijian Securities Mr. Yu, Western Lide Fund Wen Zhenyu, Huafu Fund Hu Aijun, CITIC Construction Investment Fund Wang Qi, Industrial Securities Chen Wen, Guangzhou Jinjun Investment Tan Jiaying, Zhengxin Valley Capital Shi Hang, Rongtong Fund Li Wenhai, Xingquan Fund Li Yuanhai, Galaxy Fund Yao Wenwei, Taikang Assets Cao Ling, Dacheng Fund Han Chuang, Guoshou Assets Hechuan, Taiping Assets Qin Yuanyuan, GF Fund Wang Qi, Ifing Fund Li Yuanzhuo, Wanjia Fund Wang Yang, Shibei Investment Zheng Hui, Pengyang Fund Luo Cheng, National Life Pension Wang Huanji, Zhongrong Fund Zhu Xiaoming, Zhonggeng Fund Management Liu Sheng, GF Fund Zhu Qi, Ping An Pension Gu Yihui, Fuanda Fund Sun Shaobing, China Life Assets Yu Li, South China Fund Liu Fei, Green Fund Li Yujie, Orient Securities Self-operated Hui Bowen, Zhan Bo Investment Zhang Wenmin, Ping An Fund Ji Changchun, Zhonggeng Fund Liu Sheng, Orient Securities Jiang Heze, Huaxia Fund Tong Wei, Shanghai Shangya Investment Chen Zhidan, Yongying Fund Shi Lin, CITIC Securities Lin Feng Huaxia Fund Sun Lulu, Industrial Securities Global Yu Xiyang, Ruiyuan Fund Zhong Ming, Jiahe Fund Sun Guomeng, Jinxin Fund Gao Junfang, Wanjia Fund Wang Ziyu, HuiAn Fund Zhou Jiawen, BOC Fund Luo Qing, Pengyang Fund Xu Kunlun, Zheshang Asset Management Song Qingtao, Ceibus Fund Li Bo, TEDA Manulife Lai Qingxin, National Life Security Fund Ji Tianhua, Western Lide Fund Wen Zhenyu, Wanjia Fund Wang Yang, Xingyin Fund Wang Xu, Shanghai Bank Fund Huang Huang, Taixin Fund Liu Yuxin, Ping An Fund Zhang Xiaoquan, BOCOM Kanglian Wang Yaoyong, Everbright Yongming Sun Weina, Ping An Pension Liu Qiang, Ping An Asset Management Wan Shushan, Centennial Insurance Asset Manager Wang Yong

Time

October 31, 2021, November 1, 2021

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Mr. Zhong Dehong, Secretary of the Board of Directors of the Company, Mr. Su Yun, Representative of Securities Affairs.

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date

November 1, 2021

(This article was completed by the Securities Times e company writing robot "Kuaishou Xiaoe".) ）