wanhua(SH:600309) 智通财经网·2025-11-10 07:00Core Viewpoint - The rapid growth of lithium iron phosphate (LFP) production in China is expected to support high profitability in phosphate rock for an extended period, driven by increasing demand for energy storage solutions [1][2]. Group 1: Production and Demand - China's LFP production is projected to reach 244.5 million tons in 2024 and 306 million tons in the first ten months of 2025, representing year-on-year growth of 54% and 59% respectively [1]. - In October, LFP and phosphoric acid production reached 40,000 tons and 33,500 tons, with capacity utilization rates of 75.9% and 76.7% [1]. - The demand for energy storage is anticipated to drive continued rapid growth in LFP production and sales through 2026 [1]. Group 2: Supply and Profitability - The construction cycle for phosphate rock production capacity is lengthy, with major companies like Yuntu Holdings and Chuanheng Co. expected to gradually bring new capacity online between 2027 and 2028 [2]. - Due to the sustained rapid growth in LFP production, high profitability in phosphate rock is expected to persist for a considerable time [2]. Group 3: Industry Outlook - The profitability of phosphoric acid, industrial monoammonium phosphate, and purified phosphoric acid is expected to rebound as traditional chemical companies improve capacity utilization rates [3]. - The demand surge for LFP is likely to lead to a recovery in the profitability of industrial monoammonium phosphate and purified phosphoric acid [3]. Group 4: Company Focus - Wanhua Chemical's LFP capacity is projected to reach 800,000 to 900,000 tons by the end of 2026, driven by expansion projects and high demand growth [4]. - The company is expected to benefit from cost optimization, leading to a recovery in profitability for LFP in 2026 [4]. Group 5: Investment Recommendations - Companies to watch include Wanhua Chemical (600309.SH), Longbai Group (002601.SZ), Xinyangfeng (000902.SZ), Xingfa Group (600141.SH), and Hubei Yihua (000422.SZ) [5]. - Other companies with significant future phosphate rock capacity include Chuanheng Co. (002895.SZ), Yuntu Holdings (002539.SZ), and Batian Co. (002170.SZ) [5].