Yuntianhua (600096) 2019 First Quarterly Report Review: Growth in Growth and Growth in Phosphorus Industry Continue

Yuntianhua (600096) 2019 First Quarterly Report Review: Growth in Growth and Growth in Phosphorus Industry Continue

In the first quarter of 2019, the company’s net profit attributable to mothers increased significantly, + 119% per year, and the expense ratio dropped significantly.

The company is a domestic leader in phosphate fertilizers. It already has the advantages of integrated mineral fertilizers and is expected to fully benefit from the improvement of the prosperity of the phosphorus industry. The problem of high debt ratios continues to improve marginally, and the company is optimistic about the company’s development for a long time.

We maintain the company’s EPS forecast for 2019-21 to 0.

24/0.

37/0.

47 yuan, maintain the target price of 9 yuan and “Buy” rating.

The net profit attributable to mothers increased significantly, and the expense ratio decreased significantly.

Benefiting from the increase in the price of phosphate products and urea, the company achieved operating income in the first quarter of 201913.

79 trillion, ten years +35.

9%; net profit attributable to mother 1.

12 trillion, a big increase of 119 in ten years.

1%.

The company’s three major expense ratios decreased significantly in the first quarter (two years).

90pct), of which the selling expense ratio is 4.

64%, -0 per year.

87 points; total management expenses and R & D expense ratio.

90% every year -0.

93 points; financial expense ratio 4.

46% a year -1.

10pct.

The phosphorous industry is booming and the company is expected to fully benefit.

Affected by environmental protection 南京桑拿网 supervision and protection of phosphate rock resources, domestic supply of phosphate rock has been tightened, and rising prices have promoted the prosperity of the phosphorus industry.

In the first quarter of 2019, the price of phosphate rock was +23 for central alumina.

3%, inventory levels are at historically low levels; monoammonium phosphate and diammonium prices remain high.

It is expected that phosphate mining in the future will be controlled for a long time, and the high prosperity of the phosphorus industry is expected to continue.

The company has the advantages of integrated production of mineral fertilizers, and can independently adjust the product structure according to the gross profit of each product to ensure that the company’s profits are maximized and fully enjoy the industry’s high economic dividend.

The operating cash flow is abundant, and the margin of high debt problems has improved.

The company actively solves the problem of high debt, and the asset-liability ratio is from 92 in 2017.

1% down to 90 in 2018.

8% in the first quarter of 2019, which further dropped to 90.

7%.

The company has abundant cash flow and realized net cash flow from operating activities in the first quarter of 2019.

810,000 yuan, ten years + 179%.

At the same time, considering that the company’s high capital expenditure has passed, it is expected that the future asset-liability ratio is expected to continue to decline, and there is potential for improvement.

Risk factors: Decreased demand for phosphate fertilizers; sharp decline in product prices; substantial increase in financial costs.

Investment suggestion: The company is a domestic leader in phosphate fertilizers. It has the advantages of integrated mineral fertilizers and is expected to fully benefit from the improvement of the prosperity of the phosphorus industry. The issue of high yields continues to improve marginally, and the company is optimistic about the company’s development for a long time.

We maintain that the company’s net profit forecast for motherhood for 2019-21 is 3 respectively.

37/5.31/6.

76 trillion, corresponding to 0 EPS.

24/0.

37/0.

47 yuan.

Maintain target price of 9 yuan and “Buy” rating.