Semi-annual reports of listed companies have successively disclosed that many fertilizer companies lead the market

In the first half of this year, Luxi Chemical achieved an operating income of 14.471 billion yuan, a year-on-year increase of 94.73%; and realized net profit of 2.632 billion yuan, a year-on-year increase of 1064.17%. After years of development, Luxi Chemical has adjusted its product structure around chain extension, chain supplementation, and strong chain layout, and has developed and formed coal chemical, salt chemical, fluorosilicon chemical, and chemical new materials industries with a relatively complete industrial chain. In January this year, Sinochem Group became the actual controller of the company and plans to build the company into a production base for high-end new chemical materials and chemical equipment. Backed by the Sinochem platform, Luxi Chemical will form a synergistic effect with its other pesticide chemicals, petrochemical raw materials, and intermediates to further expand upstream and downstream businesses. Considering the impact of the epidemic and the mismatch of global supply and demand, especially in the context of domestic carbon neutrality and restrictions on the "two highs", the prosperity continuity of Luxi Chemical's main chemical products is expected to exceed market expectations.

The prices of phosphorus products have generally risen,

Broaden profit margins for enterprises

From January to March 2021, driven by the rising prices of raw materials such as sulfur and liquid ammonia and strong demand in the international market, the market prices of mono ammonium phosphate and diammonium phosphate have risen sharply from the beginning of the year. From April to May, due to the shutdown of some companies in the industry and the strong demand in the Indian market, the market for mono ammonium phosphate and diammonium phosphate continued, with prices rising slightly; since June, it has been strongly promoted by autumn fertilizer preparation and export, and the market has low inventory. As a result, the domestic market supply of monoammonium phosphate is tight. By the end of June, the domestic sales price of monoammonium phosphate rose sharply to 3,500 yuan/ton (tax included), and the domestic price of diammonium phosphate rose sharply to 3250 yuan/ton (tax included).

Phosphate fertilizer is one of the basic fertilizers for crops. Among them, diammonium phosphate is strongly dependent on phosphate rock resources and the industry concentration is high. The domestic production capacity of monoammonium phosphate and diammonium phosphate exceeds 40 million tons, accounting for about half of the global production capacity. The production enterprises are mainly concentrated in the "Yungui, Sichuan, and Hubei" and other phosphate mining areas, and the market is mainly concentrated in the northwest, north, and northeast.

In the first half of 2021, as the global new crown epidemic eased, the domestic economy continued to recover, and the chemical industry ushered in a strong economic cycle. In the face of favorable market opportunities, Xingfa Group scientifically organized production and operations flexibly formulated sales strategies, and achieved record highs in the first half of the year. In the first half of 2021, the company achieved sales revenue of 9.853 billion yuan, a year-on-year increase of 5.48%; realized net profit attributable to the parent company of 1.141 billion yuan, a year-on-year increase of 730.05%. The headquarters of Xingfa Group is located in Yichang City, Hubei Province. It is rich in phosphate rock resources and is one of the five largest phosphate rock bases in the country. The phosphate rock resources are mainly distributed at the junction of the three counties (districts) of Yiling, Xingshan, and Yuan'an. Xingfa Group stated that the company currently owns about 429 million tons of phosphate ore reserves with mining rights. In addition, the company also holds 70% equity in Jingzhou Jinghua and 50% equity in Qiaogou Mining, which is held through its holding subsidiary Yuanan Jixing With 26% equity in Yi'an Industry, the abundant phosphate rock resources provide favorable conditions for the company to develop the phosphate chemical industry. In addition, the company has 32 hydropower stations with a total installed capacity of 178,500 kilowatts. Abundant hydropower resources can provide a low-cost and stable power supply for chemical production in the Xingshan area.
Industry competition is becoming increasingly fierce,

Innovative development is a breakthrough

Batian Co., Ltd. achieved an operating income of 1.163 billion yuan in the first half of the year, an increase of 27.57% over the same period of the previous year; net profit attributable to shareholders of listed companies was 56.172 million yuan, an increase of 262.78% over the same period of the previous year. Although the performance has exceeded market expectations, Batian still stated that the compound fertilizer industry has the characteristics of light assets, technical barriers are not high, and the industry has low barriers to entry. With the gradual cancellation of various price intervention measures by the Chinese government, the compound fertilizer industry is in a transitional period from government restrictions to full market prices, and industry competition is becoming increasingly fierce. The company does not rule out the possibility of increasingly fierce market competition due to the marketization of product prices and the entry of other companies into the competition. If the company cannot continue to maintain and expand its advantages and continue to innovate to cope with industry competition, the company's existing industry and market advantages will weaken.

During the reporting period, Lubei Chemical also achieved double growth in operating income and net profit, achieving an operating income of 2.123 billion yuan, an increase of 811 million yuan compared with the same period of the previous year, an increase of 61.78%; achieving net profit attributable to shareholders of listed companies The profit was 272 million yuan, an increase of 164 million yuan compared with the same period last year, an increase of 152.61%. Relying on strong R&D and innovation capabilities, Lubei Chemical has carried out several research and innovations in professional fields such as titanium dioxide, methane chloride, waste resource utilization, and salt production technology. Through the R&D and construction of a series of high-tech technology projects, the company's technical reserves have been effectively strengthened, and the company's technological leadership in the fields of titanium dioxide, waste recycling, recycling, and other fields has been ensured. At the same time, it has increased the company’s profit growth points, reduced product costs, improved product quality and market share, enhanced product market competitiveness, and effectively improved the company’s overall profitability.

The same frequency resonance is required at home and abroad,

Increase in volume and price of fertilizer products
In the first half of 2021, Liu Guo Chemical achieved a total operating income of 2.75 billion yuan, a year-on-year increase of 21.4%; realized a net profit of 150 million yuan attributable to the parent, a year-on-year increase of 132.2%. The Six Nations Chemical Industry stated that the fertilizer industry is closely related to agriculture. The increasing demand for the quality of agricultural products has led to stricter requirements on the quality of fertilizer products, and increasing attention to environmental and resource issues. The traditional growth model of factors has become unsustainable. Agricultural supply With the acceleration of side structural reforms, the fertilizer industry is bound to accelerate its transformation and upgrading. Affected by the industry's supply-side structural reform policy, domestic fertilizer production has generally shown a continuous downward trend. However, driven by the impact of the epidemic, rigid agricultural demand, guaranteeing food security, rising food prices, and rising foreign market demand, domestic fertilizer production has rebounded.

Benefiting from the implementation of the domestic and international dual-cycle strategy, the increase in international demand, and the rise in food product prices, the fertilizer industry continued to pick up in the first half of 2021. Sierte has always been adhering to the general keynote of "seek progress in stability, innovation and development", and adheres to the business philosophy of "innovation and development of enterprises, circular development, and service for agriculture, rural areas, and farmers". The technical research and productivity of organic fertilizers; the vertical continuous expansion of upstream and downstream supporting areas, under the background of the company’s existing pyrite resources, the company has fully acquired the high-quality phosphate resources of Guizhou Lufa Industrial Co., Ltd., ensuring the company’s raw materials The stable supply has promoted the company’s sustainable development. With the joint efforts of the entire company in the first half of 2021, the company’s various businesses have been steadily advancing. During the reporting period, the company achieved an operating income of 2.151 billion yuan, a year-on-year increase of 10.01%; net profit attributable to shareholders of listed companies was 252 million yuan, a year-on-year increase of 88.42 %.
According to data from the Securities Times·Databao, as of August 13, 457 A-share listed companies have released 2021 semi-annual reports. Among them, 371 companies have achieved a year-on-year increase in net profit, accounting for approximately 81%; operating income year-on-year 412 companies have increased, accounting for 90%; 354 companies have increased their net profit and operating income at the same time, accounting for about 77%; 158 companies have doubled their performance, of which Xingfa Group and Lu West Chemical ranks among them. As of August 13th, a total of 6 listed fertilizer companies followed by "China Agricultural Materials" have issued semi-annual reports, namely Luxi Chemical, Xingfa Group, Batian Co., Ltd., Lubei Chemical, Liuguo Chemical, and Sierte. The results of the semi-annual report show that all 6 companies have achieved both net profit and operating income growth. Among them, the net profit of 5 companies attributable to shareholders of listed companies has doubled, accounting for 83%, leading the market with Benyi Juechen's advantage. The performance of the chemical industry maintains high growth