YYTH(600096) 光大证券·2024-08-14 11:10Investment Rating - The report maintains a "Buy" rating for Yuntianhua (600096 SH) [2][7] Core Views - Yuntianhua's H1 2024 performance met expectations, with revenue declining 9 2% YoY to RMB 31 993 billion but net profit increasing 6 1% YoY to RMB 2 841 billion [1] - The company benefits from its leading position in the phosphorus chemical industry, with high phosphorus ore prices sustaining profitability [1] - Yuntianhua's compound fertilizer sales volume surged 43 3% YoY in H1 2024, driven by stable single fertilizer prices and increased demand for water-soluble compound fertilizers [1] - The acquisition of an additional 18 6% stake in Yunnan Phosphate Group is expected to increase annual net profit by RMB 210 million [1] Financial Performance - H1 2024 gross margin improved by 1 5 percentage points to 16 6%, supported by lower raw material costs [1] - Sales, management, and R&D expense ratios increased slightly, while financial expense ratio decreased by 0 13 percentage points [1] - The company's phosphorus ore reserves stand at nearly 800 million tons, with annual mining capacity of 14 5 million tons [1] Industry Outlook - Domestic phosphorus ore prices remained high in H1 2024, averaging RMB 1,054 per ton, similar to H1 2023 levels [1] - Yuntianhua's integrated upstream resource advantage positions it well to benefit from the sustained high phosphorus ore prices [1] Valuation and Forecast - The report maintains profit forecasts, projecting net profits of RMB 4 941 billion, RMB 5 262 billion, and RMB 5 507 billion for 2024-2026 respectively [2] - The company's P/E ratio is expected to be 6 1x, 8 1x, 7 4x, 7 0x, and 6 7x from 2022 to 2026 [3] - ROE is forecasted to decline gradually from 36 8% in 2022 to 19 0% in 2026 [3]