中化化肥 Sinofert Holdings (297 HK) 股东应占溢利同比增长 69.49%，公司受益于钾肥价格上涨 NPAtS up 69.49% YOY in 2024, the company benefits from the increase in potash fertilizer price. [Table_yemei 观点聚焦 1] Investment Focus [Table_Info] 维持优于大市 Maintain OUTPERFORM 评级 优于大市 OUTPERFORM 现价 HK$1.26 目标价 HK$1.41 HTI ESG 4.1-5.0-5.0 E-S-G: 0-5, (Please refer to the Appendix for ESG comments) 市值 HK$8.85bn / US$1.14bn 日交易额 (3 个月均值) US$6.15mn 发行股票数目 7,024mn 自由流通股 (%) 39% 1 年股价最高最低值 HK$1.26-HK$0.80 注：现价 HK$1.26 为 2025 年 03 月 31 日收盘价 资料来源： Factset ...

成长业务发展良好 2024年公司的基础业务、成长业务、生产业务收入达到108.7/80.2/23.8亿，同比变化-4%/+2%/-7%，占 比为51%/38%/11%。基础业务收入同比减少4.7亿元，受钾肥市场价格全年两次震荡式下行影响，销售 均价同比减少16%。成长业务收入增加1.8亿元，利润同比增长45%，因为公司生物+战略取得良好成 果，高端复合肥销量大幅增长。生产业务分部收入下降1.7亿元，是因为中化长山的合成氨与尿素价格 大幅下行。 生物肥料成为公司发展的重要驱动力 智通财经APP获悉，国证国际发布研报称，预计中化化肥(00297)25-27年净利润将达到12.3/13.8/15.3 亿，同比提升15.5%/12.4%/10.8%。该行看好中化化肥的生物+新型肥料的发展，销量持续优化，利润率 逐年提升。最后提升目标价至1.6港元，予"买入"评级。 国证国际主要观点如下： 业绩符合预期 2024年中化化肥实现营业收入212.7亿元，同比减少2.1%，归母净利润10.6亿元，同比增长69.5%。毛利 率12.0%，同比提升1.6个百分点，净利率5%，同比提升2.1个百分点。每股盈利0.15元，每股派息0 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致之任何損失承擔任何責任。 SINOFERT HOLDINGS LIMITED 年度業績公告 截至二零二四年十二月三十一日止年度 財務摘要 1 ‧ 本年度本集團營業額為人民幣212.65億元（二零二三年：人民幣217.28億元），同比減少2.13% ‧ 本年度本公司股東應佔溢利為人民幣10.61億元（二零二三年：人民幣6.26億元），同比增加 69.49% ‧ 本年度每股基本盈利為人民幣0.1511元（二零二三年：人民幣0.0891元），同比增加69.49% ‧ 董事會建議派付截至二零二四年十二月三十一日止年度的末期股息每股港幣0.0571元（折合約 人民幣0.0529元）（二零二三年：每股港幣0.0491元（折合約人民幣0.0445元））予股東，每股港 幣同比增加16.29%。 主席致辭 尊敬的各位股東： 歲聿雲暮，一元復始。回首二零二四年，全球經濟在複雜多變的格局中艱難前行，行業競爭日益激 烈。中化化肥控股有限公司（「本公司」 ...

Investment Rating - The investment rating for Sinofert Holdings is "Outperform" with an expected relative return exceeding 10% over the next 12-18 months [15]. Core Views - The profit attributable to shareholders for 2024 is projected to be between RMB 1.01 billion and RMB 1.11 billion, with a solid growth forecast when excluding certain impairments [2][4]. - The company is steadily advancing its "Bio+" strategy, focusing on technological innovation and enhancing operational management, which has led to significant growth in bio-fertilizer production and sales [2][5][6]. - Sinofert aims to be a leader in bio-fertilizer and soil health innovation, with a strong emphasis on brand development and product differentiation [5][6][7]. Summary by Sections Financial Performance - The expected profit attributable to shareholders for 2024 is RMB 1.01-1.11 billion, with a potential adjusted profit of RMB 11.8-12.8 billion when excluding impairments [2][4]. - The growth in operating results is attributed to the successful implementation of the "Bio+" strategy and improvements in operational efficiency [2][4]. Business Strategy - The "Bio+" strategy is central to the company's growth, focusing on becoming a leader in bio-fertilizers and soil health [5][6]. - The company has launched new products under this strategy, which have contributed to significant revenue growth [5][6]. Research and Development - Sinofert is enhancing its R&D capabilities, tackling key technologies and promoting the transformation of new products [6]. - In the first half of 2024, the company achieved a transformation of 886,000 tonnes of R&D results, indicating strong progress in product development [6]. Synergies and Collaborations - As a subsidiary of Syngenta Group, Sinofert leverages synergies in plant protection and production, enhancing its product competitiveness [7]. - Collaborative projects with Syngenta have led to the development of advanced technologies and increased revenue from synergistic activities [7].

Investment Rating - The investment rating for Sinofert Holdings is not explicitly stated in the provided documents, but the report indicates a positive outlook based on expected profit growth and strategic initiatives. Core Insights - The profit attributable to shareholders for 2024 is expected to be between RMB 1.01 billion and RMB 1.11 billion, with a solid growth forecast when excluding certain impairments [2][4] - The company is steadily promoting its "Bio+" strategy, focusing on technological innovation and enhancing operational management, which has led to increased production and sales of bio-fertilizers [2][5] - The growth in the company's operating results is attributed to the successful implementation of the "Bio+" strategy and improvements in supply chain management [4][6] Summary by Relevant Sections Financial Performance - The expected profit attributable to shareholders for 2024 is projected to be between RMB 1.01 billion and RMB 1.11 billion, with a potential adjusted profit range of RMB 1.18 billion to RMB 1.28 billion, indicating robust growth compared to RMB 1.149 billion in 2023 [2][4] - The company's growth business revenue for 2022, 2023, and the first half of 2024 were RMB 7.441 billion, RMB 7.845 billion, and RMB 5.555 billion respectively, with year-on-year growth rates of 5.43% and 5.25% [5][6] Strategic Initiatives - The "Bio+" strategy aims to position the company as a leader in bio-fertilizer and soil health innovation, supported by a strong research platform and new product development [5][6] - The company has launched new products such as Lanlin, Yaxin, and Kodafon, contributing to high-speed business growth [5][6] Research and Development - In the first half of 2024, the company tackled nine key technologies and completed trial production of four key products, achieving a transformation volume of 886,000 tonnes [6][7] - The company is enhancing its R&D capabilities and has established a team led by three chief scientists to focus on biotechnology and soil health [6][7] Synergistic Collaborations - As a subsidiary of Syngenta Group, the company benefits from collaborative projects that enhance product competitiveness, including the establishment of a Plant Protection and Nutrition Centre [7] - The company achieved synergistic revenue of RMB 240 million from plant protection in the first half of 2024, with a three-year compound growth rate of 21% [7]

Investment Rating - Buy-A rating (首次覆盖) [1][8] Core Views - The company is a high-dividend-paying central state-owned enterprise (SOE) with a focus on differentiated products and improving profitability [2] - The "Bio+" strategy is accelerating, driving growth in high-margin biological fertilizers and capturing demand from economic crops [3] - The company has abundant phosphate ore reserves, with potential for future growth [4] Financial Performance - Revenue for the first three quarters of 2024 reached RMB 18.21 billion, with net profit of RMB 1.287 billion, a 3% YoY increase [1] - Gross margin improved from 8.66% in 2021 to 12.15% in H1 2024, while net margin increased from 3.88% to 7.77% over the same period [2] - The company's cash dividend payout ratio reached 50% in 2023, with cumulative cash dividends of RMB 1.007 billion over 2021-2023 [2] "Bio+" Strategy - The "Bio+" strategy focuses on core products like Blue Scale and Kedefeng, with new products such as the "Huanfeng" brand driving growth [3] - Revenue from the growth business reached RMB 5.555 billion in H1 2024, up 5% YoY, with pre-tax profit of RMB 398 million, a 27% YoY increase [3] - The company has completed trial production and sales of four key "Bio+" products, leveraging resources from Sinochem Group and Syngenta [3] Phosphate Ore Reserves - The company's subsidiary, Sinochem Yunlong, has nearly 200 million tons of phosphate ore reserves, with the Meizushao mining area holding 110 million tons and the Dawan mining area holding 90 million tons [4] - The Meizushao mining area has an annual production capacity of 600,000 tons of high-quality, low-silicon, low-heavy-metal phosphate ore, with significant future potential [4] Valuation and Forecast - EPS for 2024-2026 is forecasted at RMB 0.17, RMB 0.19, and RMB 0.20, respectively, with corresponding P/E ratios of 6.0x, 5.1x, and 5.0x [8] - The company's dividend yield is expected to be 8.28%, 9.65%, and 9.86% for 2024-2026, based on a 50% payout ratio [2] - Revenue is projected to grow by 14.02% in 2024, with net profit expected to increase by 85.33% YoY [10]

Financial Performance - The company achieved a net profit of RMB 1.073 billion in the first half of 2024, remaining flat year-on-year, with profit attributable to shareholders increasing by 4.68% to RMB 1.051 billion[8] - Revenue for the first half of 2024 reached RMB 13.681 billion, with a net profit attributable to shareholders of RMB 1.051 billion, a year-on-year increase of 4.68%[19] - Revenue for the six months ended June 30, 2024, reached RMB 13,680,872 thousand, a 4.2% increase compared to RMB 13,127,927 thousand in the same period of 2023[80] - Gross profit for the first half of 2024 was RMB 1,662,576 thousand, up 7.2% from RMB 1,550,255 thousand in the first half of 2023[80] - Operating profit for the six months ended June 30, 2024, was RMB 1,117,712 thousand, a 2.5% increase from RMB 1,090,885 thousand in the same period of 2023[80] - Net profit attributable to shareholders for the first half of 2024 was RMB 1,050,926 thousand, a 4.7% increase compared to RMB 1,003,919 thousand in the first half of 2023[80] - Basic and diluted earnings per share for the six months ended June 30, 2024, were RMB 0.1496, up 4.7% from RMB 0.1429 in the same period of 2023[81] - The company's comprehensive income for the six months ended June 30, 2024, was RMB 996,584 thousand, a 7.2% decrease compared to RMB 1,073,659 thousand in the same period of 2023[81] - Total revenue for the six months ended June 30, 2024, was RMB 13,680,872 thousand, compared to RMB 13,127,927 thousand for the same period in 2023, representing a 4.2% increase[93][94] - Segment profit for the six months ended June 30, 2024, was RMB 1,223,944 thousand, up 1.6% from RMB 1,205,195 thousand in the same period in 2023[93][94] - Profit before tax for the six months ended June 30, 2024, was RMB 1,238,609 thousand, a 7.2% increase from RMB 1,155,414 thousand in the same period in 2023[93][94] - The company's income tax expense for the six months ended June 30, 2024, was RMB 166,017 thousand, a 97.6% increase from RMB 83,995 thousand in the same period in 2023[100] - Basic earnings per share for the six months ended June 30, 2024, were RMB 1,050,926 thousand, a 4.7% increase from RMB 1,003,919 thousand in the same period in 2023[102] Business Segments and Product Performance - The growth business segment generated revenue of RMB 5.555 billion, a 5% year-on-year increase, with pre-tax profit reaching RMB 398 million, up 27% year-on-year[8] - The production segment achieved a pre-tax profit of RMB 357 million in the first half of 2024, remaining flat year-on-year[8] - The company's basic business achieved revenue of RMB 6.878 billion in the first half of the year, an increase of RMB 410 million year-on-year, with a pre-tax profit of RMB 469 million, down 12% due to price declines[9] - Sales of bio-phosphate fertilizers increased by 10% year-on-year, driving growth in the basic business[9] - The company launched its first bio-integrated potassium fertilizer product, "Weidefeng," nationwide, enhancing potassium fertilizer efficiency[15] - The company's subsidiary, Sinochem Fuling, successfully produced qualified bio-phosphate fertilizer products under the brand "Linbao"[12] - The company introduced the "Huanfeng®" brand, a full-nutrient crop-specific fertilizer, integrating multiple advanced technologies developed by Syngenta Group China[13] - The company achieved a pre-tax profit of RMB 81.6694 million at Zhonghua Fuling, with a phosphate plant capacity utilization rate of 106.38%[20] - Zhonghua Yunlong produced 182,100 tons of feed calcium and achieved a pre-tax profit of RMB 241.28 million, an increase of RMB 4.0963 million year-on-year[21] - Zhonghua Changshan achieved a pre-tax profit of RMB 42.2 million, a decrease of RMB 21.37 million year-on-year due to low market prices for synthetic ammonia and urea[21] - The company successfully produced differentiated phosphate fertilizer products "Linbao" and "Meilinmei"[21] - The company's R&D achievements were transformed into 886,000 tons of products in the first half of 2024[19] - The company's differentiated compound fertilizer sales reached 1.1 million tons, a year-on-year increase of 14.62%[25] - The "Bio+" high-end product sales increased by 65% year-on-year[25] - The special fertilizer business achieved revenue of RMB 444 million, a year-on-year increase of 23.28%[26] - The total production capacity of the special fertilizer business reached 185,000 tons[26] - The sales of key "Double Excellence" products in the special fertilizer business increased by 50% year-on-year[26] - The company achieved plant protection synergy revenue of RMB 240 million, with a three-year compound growth rate of 21%[27] - The seed synergy revenue reached RMB 33.96 million, with nearly 60 synergistic varieties sold across crops such as rice, corn, vegetables, and wheat[27] - Sales volume for the first half of 2024 reached 4.66 million tons, a 17.38% increase compared to the same period in 2023[34] - Revenue for the first half of 2024 was RMB 13.681 billion, a 4.21% increase year-over-year[34] - Gross profit for the first half of 2024 was RMB 1.663 billion, up 7.29% compared to the same period in 2023[34] - Net profit attributable to shareholders for the first half of 2024 was RMB 1.051 billion, a 4.68% increase year-over-year[34] - The company's differentiated product sales reached 1.32 million tons in the first half of 2024, a 14.56% increase year-over-year[35] - Sales of differentiated compound fertilizers reached 1.1 million tons in the first half of 2024, a 14.62% increase compared to the same period in 2023[35] - Revenue from compound fertilizers increased to RMB 4,691,743 thousand in the six months ended June 30, 2024, from RMB 4,528,876 thousand in the same period of 2023[91] - Revenue from phosphate fertilizers rose to RMB 4,175,840 thousand in the six months ended June 30, 2024, from RMB 3,475,313 thousand in the same period of 2023[91] - Revenue from potash fertilizers decreased to RMB 2,507,905 thousand in the six months ended June 30, 2024, from RMB 2,872,389 thousand in the same period of 2023[91] - Revenue from special fertilizers increased to RMB 443,668 thousand in the six months ended June 30, 2024, from RMB 359,881 thousand in the same period of 2023[91] - Total revenue from customer contracts was RMB 13,680,872 thousand in the six months ended June 30, 2024, compared to RMB 13,127,927 thousand in the same period of 2023[91] - Revenue from Mainland China accounted for RMB 13,114,553 thousand in the six months ended June 30, 2024, up from RMB 12,611,224 thousand in the same period of 2023[91] R&D and Innovation - The company launched a new "Bio+" product, the "Huanfeng®" brand, integrating advanced technologies from Syngenta Group China[8] - The company completed the trial production and sales of 4 key products under the "Bio+" strategy, including "Bio+" organic-inorganic fertilizer - Huanfeng and "Bio+" carbohydrate-soluble fertilizer - Shuidifeng[9] - The company obtained 48 authorized invention patents, with 23 in the field of biotechnology, supporting the "Bio+" strategy[9] - R&D achievements were converted into 886,000 tons of products, a year-on-year increase of 17.2%[9] - The company launched the "Weidefeng" series of potassium sulfate products to enhance terminal agricultural technical services[23] - The company plans to focus on the "Bio+" strategy, aiming to enhance R&D capabilities and increase investment in new bio-fertilizer technologies[33] Operational Efficiency and Management - The company implemented 24 actions across subsidiaries to enhance production management and operational efficiency[8] - The company's production capacity utilization rate remained at a relatively high level within the industry[8] - The company focused on optimizing its product structure, driving high growth in key products such as "Blue Scale" and "Kedefeng"[8] - The company conducted benchmarking studies with leading companies to strengthen production management practices[8] - The company maintained strict safety production and internal control management, ensuring stable operations[8] - The company utilized 686,000 tons of phosphogypsum, achieving a comprehensive utilization rate of 100%[21] - The company conducted over 30,000 comprehensive technical service activities, benefiting over 1.4 million farmers[28] - The company's digital marketing activities reached over 5 million online users and covered over 300,000 farmers through offline promotion meetings[29] - The company conducted over 30,000 technical service activities and established more than 1,500 demonstration fields in the first half of 2024[32] - The company provided direct benefits to over 4 million farmers through various agricultural support initiatives in the first half of 2024[32] - The company launched the "Houpu Soil Health +" service platform, which has developed 18 sets of soil health indicators and solutions[32] - The company employed approximately 4,379 full-time employees as of June 30, 2024, with compensation benchmarked against market levels[76] - The company conducted training for 4,245 employees, totaling 28,865 training hours in the first half of 2024[76] Financial Position and Liquidity - The company's cash and cash equivalents as of June 30, 2024, amounted to RMB 3.762 billion, primarily held in RMB and USD[61] - The company's total interest-bearing liabilities as of June 30, 2024, were RMB 1.810 billion, compared to RMB 1.829 billion as of December 31, 2023[62] - The company has obtained bank credit facilities equivalent to RMB 24.204 billion, including USD 759 million and RMB 18.792 billion, with unused credit facilities of RMB 21.214 billion, including USD 728 million and RMB 16.020 billion[64] - The company plans to repay its loans using internal resources[65] - The company manages liquidity risk by strengthening daily cash management, forecasting and executing capital plans, and maintaining sufficient cash and cash equivalents[72] - Total non-current assets increased to RMB 8,820,810 thousand as of June 30, 2024, compared to RMB 7,854,561 thousand as of December 31, 2023[82] - Current assets decreased to RMB 11,137,535 thousand as of June 30, 2024, from RMB 14,128,340 thousand as of December 31, 2023[82] - Inventory decreased significantly to RMB 3,418,501 thousand as of June 30, 2024, from RMB 5,683,619 thousand as of December 31, 2023[82] - Trade receivables and bills increased to RMB 723,065 thousand as of June 30, 2024, from RMB 469,532 thousand as of December 31, 2023[82] - Total current liabilities decreased to RMB 8,006,169 thousand as of June 30, 2024, from RMB 10,631,821 thousand as of December 31, 2023[84] - Net current assets stood at RMB 3,131,366 thousand as of June 30, 2024, compared to RMB 3,496,519 thousand as of December 31, 2023[84] - Total equity increased to RMB 10,608,577 thousand as of June 30, 2024, from RMB 9,918,784 thousand as of December 31, 2023[84] - Profit attributable to shareholders for the period was RMB 1,050,926 thousand as of June 30, 2024[85] - Other comprehensive income for the period was a loss of RMB 76,008 thousand as of June 30, 2024[85] - Total comprehensive income for the period was RMB 974,918 thousand as of June 30, 2024[85] - Operating cash inflow for the six months ended June 30, 2024, was RMB 1,212,486 thousand, slightly lower than RMB 1,214,638 thousand in the same period of 2023[86] - Investment cash outflow for the six months ended June 30, 2024, was RMB 1,275,005 thousand, compared to RMB 984,324 thousand in the same period of 2023[86] - Cash and cash equivalents decreased by RMB 146,756 thousand in the six months ended June 30, 2024, compared to an increase of RMB 234,363 thousand in the same period of 2023[87] - The company's financing costs for the six months ended June 30, 2024, were RMB 31,419 thousand, a 13.6% decrease from RMB 36,365 thousand in the same period in 2023[96] - Depreciation expenses for the six months ended June 30, 2024, were RMB 169,263 thousand for owned property, plant, and equipment, and RMB 15,414 thousand for right-of-use assets[97] - The company acquired property, plant, and equipment with an original value of RMB 243,692 thousand during the six months ended June 30, 2024, a 37.7% decrease from RMB 391,296 thousand in the same period in 2023[103] - No impairment loss was recognized for the six months ended June 30, 2024 (same period in 2023: none)[104] - Goodwill as of June 30, 2024, was RMB 856,454 thousand, compared to RMB 854,137 thousand as of December 31, 2023[105] - Trade receivables and notes, net of impairment allowance, totaled RMB 723,065 thousand as of June 30, 2024, up from RMB 469,532 thousand as of December 31, 2023[107] - Trade payables and notes amounted to RMB 3,435,510 thousand as of June 30, 2024, down from RMB 3,771,752 thousand as of December 31, 2023[109] - Bank and other borrowings totaled RMB 1,741,974 thousand as of June 30, 2024, compared to RMB 1,788,858 thousand as of December 31, 2023[112] - The effective annual interest rate for variable-rate borrowings was 3.00% as of June 30, 2024, down from 3.35% as of December 31, 2023[115] - The company did not declare an interim dividend for the six months ended June 30, 2024 (same period in 2023: none)[116] - The dividend per share for the previous financial year was HKD 0.0491 (same period in 2023: HKD 0.0623)[117] - The fair value of non-listed securities as of June 30, 2024, was RMB 46,142 thousand, classified under Level 3 of the fair value hierarchy[119] - The fair value of accounts receivable (notes) as of June 30, 2024, was RMB 43,968 thousand, also classified under Level 3 of the fair value hierarchy[119] - The fair value of forward foreign exchange contracts under Level 2 was RMB (21,810) thousand as of June 30, 2024[119] - The total fair value of financial instruments classified under Level 3 as of June 30, 2024, was RMB 90,110 thousand[119] - The fair value of non-listed securities decreased by RMB 118,211 thousand during the six months ended June 30, 2024[124] - The fair value of accounts receivable (notes) decreased by RMB 25,154 thousand during the six months ended June 30, 2024[124] - The company's capital commitments for property, plant, and equipment as of June 30, 2024, amounted to RMB 41,506 thousand[126] - The fair value of non-listed securities as of December 31, 2023, was RMB 164,353 thousand, classified under Level 3[120] - The fair value of accounts receivable (notes) as of December 31, 2023, was RMB 69,122 thousand, classified under Level 3[120] - The total fair value of financial instruments classified under Level 3 as of December 31, 2023, was RMB 233,475 thousand[120] - The company repaid a loan of RMB 11.46 million to a subsidiary of its ultimate holding company in 2024[132] - The company provided financial guarantees to an associate amounting to RMB 478.70 million in 2023[132] - The company loaned RMB 167.67 million to an associate in 2024 with an annual interest rate based on the one-year loan market quotation rate[135] - The company's cash and cash equivalents stood at RMB 732.89 million as of June 30, 2023[134] Market and Industry Trends - The company's fertilizer product prices showed a "V" trend, with prices recovering in April and exceeding the previous year's levels by June[8] - Fertilizer imports increased by 20.0% to 7.27 million tons, while exports decreased by 4

Investment Rating - The report maintains a **Buy** rating for Sinochem Fertilizer (297 HK) with a target price of **HKD 1 4**, representing a **49% upside** from the current price of HKD 0 94 [1][4] Core Views - Sinochem Fertilizer's H1 2024 net profit attributable to shareholders grew by **4 7% YoY to RMB 1 05 billion**, exceeding expectations [1][2] - The company's revenue in H1 2024 reached **RMB 13 68 billion**, up **4 2% YoY**, driven by improved product mix and operational efficiency [2] - The **Bio+ strategy** is showing significant results, with differentiated product sales reaching **1 32 million tons**, up **14 6% YoY** [2] - The report raises the company's net profit forecasts for 2024-2026 to **RMB 1 09/1 18/1 28 billion**, representing a **74%/8%/8% YoY growth** respectively [1][2] Financial Performance Revenue and Profit - H1 2024 revenue: **RMB 13 68 billion**, up **4 2% YoY** [2] - H1 2024 net profit attributable to shareholders: **RMB 1 05 billion**, up **4 7% YoY** [2] - 2024E-2026E revenue growth: **6%/5%/6%** [3][9] - 2024E-2026E net profit growth: **74%/8%/8%** [3][9] Product Sales - Total fertilizer sales in H1 2024: **4 66 million tons**, up **17% YoY** [2] - Compound fertilizer revenue: **RMB 4 69 billion**, up **4% YoY** [2] - Phosphate fertilizer revenue: **RMB 4 18 billion**, up **20% YoY** [2] - Potassium fertilizer revenue: **RMB 2 51 billion**, down **13% YoY** [2] - Special fertilizer revenue: **RMB 440 million**, up **23% YoY** [2] Profitability - 2024E-2026E gross margin: **11%/11%/11%** [3][9] - 2024E-2026E net margin: **5%/5%/5%** [3][9] - 2024E-2026E ROE: **5%/6%/6%** [9] Strategic Initiatives - The **Bio+ strategy** is driving growth, with differentiated product sales reaching **1 32 million tons**, up **14 6% YoY** [2] - Key new products such as **Huanfeng**, **Weidefeng**, and **Shuifeng** have been launched, gaining market recognition for their quality and functionality [2] - The company plans to increase R&D investment in **Bio+ fertilizers** and develop large-scale biological products to further boost performance [2] Valuation and Market Performance - Target price: **HKD 1 4**, based on **8 3x 2024E P/E** [1][4] - Current price (as of 2024-08-26): **HKD 0 94** [4] - Market cap: **HKD 6 6 billion** [5] - 12-month price range: **HKD 0 7-1 1** [5] Financial Forecasts Income Statement - 2024E-2026E revenue: **RMB 23 06/24 31/25 71 billion** [8] - 2024E-2026E net profit: **RMB 1 09/1 18/1 28 billion** [8] Balance Sheet - 2024E-2026E total assets: **RMB 20 51/21 23/22 07 billion** [10] - 2024E-2026E equity: **RMB 10 74/11 42/12 16 billion** [10] Cash Flow - 2024E-2026E operating cash flow: **RMB 1 48/1 71/1 81 billion** [11] - 2024E-2026E net cash change: **RMB 550/444/159 million** [11]

Investment Rating - The report initiates coverage with an "Outperform" rating for Sinofert Holdings, expecting a relative performance exceeding the market benchmark over the next 12-18 months [3][20]. Core Viewpoints - Sinofert Holdings is the largest comprehensive fertilizer enterprise in China, engaged in the integrated operation of production, supply, and marketing of fertilizer products. The company has been actively developing its "Bio+" strategy, which has led to the segmentation of its business into Basic Business, Growth Business, and Production [2][16]. - The company's recurring net profit for the first half of 2024 increased by 4.68% year-on-year, with total operating income showing a slight recovery after a decline in 2023 [3][17]. - The Growth Business segment has shown rapid growth, with revenue and profit increasing significantly due to the introduction of new products and a focus on bio-fertilizers and soil health [18][19]. Financial Performance - For the first half of 2024, the company reported total operating income of 21.776 billion yuan, with a year-on-year growth of 3.23%. The recurring net profit was 1.051 billion yuan, reflecting a 4.68% increase compared to the previous year [3][17]. - The gross sales margin for 2024H1 increased by 0.34 percentage points to 12.15% year-on-year [3][17]. - The forecast for net profit from 2024 to 2026 is projected to be 1.271 billion yuan, 1.450 billion yuan, and 1.592 billion yuan, respectively, with corresponding EPS of 0.18, 0.21, and 0.23 yuan per share [20]. Business Segmentation - The Basic Business segment focuses on sourcing and selling potash, phosphate fertilizers, and sulfur, while the Growth Business is dedicated to bio-compound fertilizers, specialty fertilizers, plant protection, and seeds [2][16]. - Revenue from the Growth Business for 2022, 2023, and the first half of 2024 was 7.441 billion yuan, 7.845 billion yuan, and 5.555 billion yuan, respectively, with a year-on-year growth of 5% [18][19]. Synergistic Effects - The company leverages its relationship with Syngenta Group to enhance product competitiveness, achieving significant revenue from plant protection and seed synergy projects [19][20].

Financial Performance - The group's revenue for the six months ended June 30, 2024, was RMB 13.681 billion, representing a year-on-year increase of 4.21%[2] - The profit attributable to shareholders for the same period was RMB 1.051 billion, reflecting a year-on-year growth of 4.68%[2] - The basic earnings per share for the period was RMB 0.1496, an increase of 4.68% compared to the previous year[2] - For the first half of 2024, the company achieved a revenue of RMB 13.681 billion, with a net profit attributable to shareholders of RMB 1.051 billion, representing a year-on-year growth of 4.68%[8] - Revenue for the same period was RMB 13.681 billion, an increase of RMB 553 million or 4.21% year-on-year, primarily driven by sales volume growth[26] - Gross profit reached RMB 1.663 billion, reflecting a 7.29% increase compared to the previous year[24] - The group achieved a sales volume of 4.66 million tons for the six months ended June 30, 2024, representing a 17.38% increase compared to the same period in 2023[24] - The segment profit for the six months ended June 30, 2024, was RMB 1.224 billion, with the basic business segment achieving a profit of RMB 469 million, and the growth business segment achieving a profit of RMB 398 million, which represents a 27% increase compared to the same period last year[31] - The company's attributable profit for the six months ended June 30, 2024, was RMB 1.051 billion, an increase of 4.68% compared to RMB 1.004 billion for the same period last year[34] Business Segments - The growth business segment achieved revenue of RMB 5.555 billion, with a year-on-year increase of 5%[3] - The basic business segment's revenue increased by RMB 410 million to RMB 6.878 billion, while the pre-tax profit decreased by 12% to RMB 469 million due to price declines[4] - The company's special fertilizer business reached a production capacity of 185,000 tons, generating revenue of RMB 444 million, a year-on-year increase of 23.28%[15] - The sales of differentiated products totaled 1.32 million tons, a year-on-year increase of 14.56%, with differentiated compound fertilizer sales reaching 1.1 million tons, up 14.62%[25] Product Development and Innovation - The company launched the new product "Huanfeng®," a comprehensive nutrient fertilizer, marking a significant milestone in fertilizer technology[3] - The company completed the trial production and sales of four key products under the "Biological+" strategy, achieving a 17.2% year-on-year increase in R&D results conversion to 886,000 tons[4] - The company promoted its third-generation biological phosphate fertilizer series "Meilinmei," enhancing phosphate utilization and soil health[13] - The sales of high-end "Biological+" products increased by 65% year-on-year, driven by brand promotion and technical marketing[14] Market and Economic Outlook - The company anticipates continued economic recovery in the second half of 2024, with a focus on agricultural input demand driven by stable grain production and government policies[5] - The import volume of fertilizers in China increased by 20.0% year-on-year, reaching 7.27 million tons, while the export volume decreased by 4.6% to 11.885 million tons[6] - The company is responding to global economic uncertainties while seizing opportunities from technological innovation and consumption upgrades[23] Operational Efficiency and Strategy - The company plans to enhance its integrated system for nutrient efficiency, biological agents, and soil health, while promoting the "Biological+" strategic transformation[5] - The company aims to enhance its green development strategy by implementing advanced low-carbon process technologies and achieving a comprehensive utilization rate of phosphogypsum at 100%[10] - The group launched the "Thick Soil Health+" service platform aimed at sustainable development and commercial transformation, establishing 18 soil health indicator systems[22] Risk Management and Compliance - The company has established risk management strategies to mitigate market risks, including currency, interest rate, and other price risks, while maintaining a cautious approach to foreign exchange[60] - Credit risk management procedures are in place to ensure timely collection of receivables and minimize bad debt losses, with monthly checks on major trade receivables[61] - The company ensured compliance with domestic and international regulatory requirements, safeguarding business operations and asset security[20] Employee and Governance - The company employed approximately 4,379 full-time employees as of June 30, 2024, with a focus on competitive salary structures to attract and retain talent[65] - The company is committed to maintaining high standards of corporate governance, adhering to the applicable code provisions[92] - The board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[94] Financial Position and Liquidity - The inventory balance as of June 30, 2024, was RMB 3.419 billion, a decrease of RMB 2.265 billion or 39.85% compared to RMB 5.684 billion at the end of 2023[39] - Trade receivables and notes as of June 30, 2024, amounted to RMB 723 million, an increase of RMB 253 million or 53.83% compared to RMB 470 million at the end of 2023[40] - The current ratio improved to 1.39 as of June 30, 2024, compared to 1.33 as of December 31, 2023[50] - The group has unused bank credit facilities amounting to RMB 21.214 billion as of June 30, 2024, including USD 7.28 million and RMB 16.020 billion[53]