新股覆盖研究：红四方

Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected investment return exceeding 15% over the next six months compared to the CSI 300 index [38]. Core Viewpoints - The company, Hong Sifang (603395.SH), specializes in the research, production, sales, and service of compound fertilizers and nitrogen fertilizers. It has established a comprehensive system for research and development, production, sales, and agricultural services, with a product range that includes various types of fertilizers [11][12]. - The company has shown a revenue trend with figures of 3.05 billion CNY in 2021, 4.17 billion CNY in 2022, and 3.90 billion CNY in 2023, reflecting a year-on-year growth of 13.90%, 36.56%, and a decline of 6.49% respectively. The net profit attributable to the parent company was 1.11 billion CNY, 1.19 billion CNY, and 1.58 billion CNY for the same years, with year-on-year changes of -7.59%, 7.64%, and 32.77% respectively [12][4]. Summary by Sections Basic Financial Status - The company achieved operating revenues of 3.05 billion CNY, 4.17 billion CNY, and 3.90 billion CNY from 2021 to 2023, with year-on-year growth rates of 13.90%, 36.56%, and -6.49% respectively. The net profit attributable to the parent company was 1.11 billion CNY, 1.19 billion CNY, and 1.58 billion CNY, with year-on-year changes of -7.59%, 7.64%, and 32.77% respectively. For the first nine months of 2024, the company reported revenues of 2.67 billion CNY, a decrease of 11.41% year-on-year, and a net profit of 112 million CNY, down 15.88% year-on-year [12][4][11]. Industry Situation - The company operates in the fertilizer industry, specifically in the compound fertilizer and nitrogen fertilizer segments. The compound fertilizer application rate in China has been steadily increasing, reaching 42.30% in 2020, compared to 70%-80% in developed countries, indicating room for growth in the domestic market [19][23]. Company Highlights - The company is a state-owned enterprise under the State-owned Assets Supervision and Administration Commission, with a strong market position in compound fertilizer production. It has a production capacity of 2.35 million tons per year, ranking 10th in the domestic market. The company is expanding its product range to include new types of fertilizers and potassium fertilizers [25][26]. - The company has established a nationwide sales network and has been involved in various agricultural technology collaborations since 2015, enhancing its market presence and product offerings [11][12]. Investment Projects - The company plans to invest in two major projects: a 200,000-ton/year new type of efficient special fertilizer project and a 50,000-ton/year high-quality potassium fertilizer project. These projects aim to enhance production capacity and meet market demand for specialized fertilizers [29][28]. Comparison with Industry Peers - In 2023, the company reported revenues of 3.90 billion CNY, with a net profit of 158 million CNY. Comparatively, peer companies had an average revenue of 18.57 billion CNY and an average PE-TTM of 17.96X. The company's revenue and gross profit margin are below the industry average [31][32].