Yuntianhua (600096) Interim Review: Asset-liability ratio continued to decline in line with expectations 2Q19 Phosphate ore and phosphate fertilizer prices gradually declined

Yuntianhua (600096) Interim Review: Asset-liability ratio continued to decline in line with expectations 2Q19 Phosphate ore and phosphate fertilizer prices gradually declined

Investment Highlights: The company released its 2019 Interim Report, and its performance was in line with expectations.

1H19 company achieved operating income of 284.

0.2 million yuan (+22 compared with the same period last year).

60%), net profit attributable to mother is 1.

270,000 yuan (+91.

98%), of which non-recurring profit and loss is 8148.

09,900,000 yuan, including the acquisition of Dadi Yuntianhua in the transition period of 2956.

20,000 yuan, 4659 government subsidies.

930,000 yuan, etc., the net profit after returning to the mother is 4518.

99 million yuan, performance in line with expectations.

2Q19 achieved operating income of 146.

1.5 billion (+12 year-on-year.

23%, quarterly +6.

01%), net profit attributable to mother is 0.

1.4 billion (yoy-6.

67%, QoQ-87.

5%), sales expenses, management expenses (including research and development expenses), and financial expenses increase by 6 each.

98%, 2.

29%, 4.

35%, up -6 from the previous month.

56%, -10.

72%, 5.


The single quarter revenue growth in the second quarter of 19 was mainly due to the increase in imported soybean trade and commercial fertilizer business, and the net profit margin was mainly due to the replacement of phosphate rock, diammonium phosphate and polyformaldehyde.

The prices of 1H19 diammonium phosphate and polyformaldehyde increased, but the gross profit rate of phosphate fertilizer continued to rise due to the decline in the cost of purchasing raw materials.

In the first half of the year, the export volume of phosphate and compound fertilizer increased, and the export price fluctuated. The 2Q19 company’s average sales price of diammonium phosphate (excluding tax) replaced 9 separately from the previous month.

06%, 3% to 2317 yuan / ton, the annual sales volume is 20% and 8% respectively.

The price of phosphate ore decreased compared with the beginning of the year, and the average price of phosphate ore sales in the second quarter of 19 decreased from the previous month.

twenty one%.

However, due to the decline of raw materials such as phosphate rock, synthetic ammonia, and sulfur, the gross profit margins of monoammonium phosphate and diammonium phosphate of 1H19 Company gradually increased, respectively.

07, 3.

77 good 29.

13%, 31.


The Yangtze River ‘s 西安耍耍网 “three phosphorus” special investigation and rectification action will accelerate the supply side reform of the phosphate chemical industry. The company is a leader in the integration of minerals and fertilizers and will fully benefit from the increase in concentration.

The cost advantage of urea is very strong, and the average selling price of urea in 2Q19 continued to increase1.

5%, but sales are temporarily reduced by 5.

2%, 1H19 urea gross margin decreased slightly by 0.9 up to 39.


In the 1H19 polyformaldehyde industry, some of the original suspended producers gradually resumed production, and production capacity gradually picked up. However, sluggish downstream demand led to lower prices. The average sales price of the polyformaldehyde in the 1H19 company decreased by 14 respectively.

0%, 17.

5%, the gross profit margin has decreased by 6 every year.

64 up to 32.


Continue to advance debt reduction, actively optimize asset structure, and reduce the asset-liability ratio for three consecutive quarters.

1H19 Phosphate Group introduced CCB investment and Bank of Communications investment to complete the 10 trillion market-oriented debt-to-equity swap. In 2Q19, the asset-liability ratio continued to decrease by 1 compared with the previous quarter.

9 up to 88.


The ceiling of the interest-bearing budget has decreased, but the financial expenses have decreased significantly due to the rise in the cost of comprehensive funds. The company’s financial expenses in the second quarter of 19 were 6.

4.8 billion, a year-on-year increase of 4%.

35%, 5.


Due to the decrease in controllable expenses, the management expenses (including research and development expenses) in the second quarter of 19 decreased by 10 from the previous month.

72%, but due to the size of the fair incentive amortization increase costs about 0.

2.5 billion, so it continues to rise by 2 every year.


In the future, the company will continue to optimize and control the controllable expenses. At the same time, it will actively seek investors, accelerate cooperation with financial institutions, promote equity financing and share-equity debt-to-equity conversion of subsidiaries, increase the company’s equity capital through capital increase and share expansion, improve the capital structure, and reduceAssets and liabilities.

The reform of state-owned enterprises continued to deepen and accelerated.

In 1H19, the company deepened the management of professional managers. The company managers, functional department heads and managers of subordinate units realized the transformation of professional managers.

The “Double Hundred Actions” reform was promoted in depth, and more than 10 units, including Shuifu Yuntianhua and Phosphate Group, fully implemented contract management.

The implementation of precision incentives, the implementation of performance stock incentive plans, excess profit sharing schemes, “dual-effect” salary management measures for key minorities, core backbones, and all employees, accelerated the reform of state-owned enterprises.

Earnings forecast and investment rating: In the third quarter, based on the unexpected decline in the price of phosphate fertilizer, we lowered the company’s profit forecast for 2019-2021, and expected the company’s net profit forecast for the mother to be 2019-2021.

05, 5.

24, 6.

7.4 billion (was 5).

12, 6.

40, 7.

8 billion), EPS is 0.

21, 0.

37, 0.

47 yuan (was 0.

36, 0.

45, 0.

55 yuan), the current market value of the corresponding PE is 25X, 15X, 12X.

Selected as a “Double Hundred Enterprises” ushered in the historical performance of state-owned enterprise reform, fair incentives to highlight reform and reform, and confidence in future operations. The cost advantages of mineral integration are obvious. The “three phosphorus” special investigation and governance action has accelerated the supply-side reform of the industry, which has benefited phosphorus in the long run.With the gradual improvement of the company’s asset and liability structure, the chemical industry has reached an inflection point in its performance improvement and maintained its overweight rating.

Risk Warning: 1.

Phosphate ore and phosphate fertilizer prices continued to fall 2.Progress in debt reduction is expected gradually, asset-liability ratio rises