Investment Rating - The report maintains an "OUTPERFORM" rating for the company with a target price of HK$1.41, based on a current price of HK$1.26 [2][10]. Core Insights - The company reported a profit attributable to shareholders of RMB1.061 billion in 2024, a year-on-year increase of 69.49%, despite a slight decrease in operating revenue of 2.13% to RMB21.265 billion [6][10]. - The company benefits from rising potash fertilizer prices, with potash operating income decreasing from RMB5.250 billion in 2023 to RMB3.939 billion in 2024, accounting for 19% of total revenue [8][10]. - The sales of bio-fertilizers have significantly increased, with revenue share rising from 12% in 2022 to 22% in 2024, and gross profit share increasing from 14% to 36% during the same period [9][10]. Financial Performance - The company’s revenue projections for 2025-2027 are RMB22.693 billion, RMB24.979 billion, and RMB27.292 billion, respectively, with net profits expected to be RMB1.400 billion, RMB1.601 billion, and RMB1.863 billion [5][10]. - The diluted EPS is projected to increase from RMB0.20 in 2025 to RMB0.27 in 2027, reflecting a positive growth trajectory [5][10]. - The company’s gross profit margin is expected to stabilize around 12% to 12.5% over the forecast period [5][10]. Product and Business Segmentation - In 2024, the company sold 7.21 million tons of fertilizers, with compound fertilizers, phosphate fertilizers, and potash fertilizers generating revenues of RMB6.748 billion, RMB6.660 billion, and RMB3.939 billion, respectively [7][10]. - The growth business segment saw a revenue increase of 2.23% year-on-year, while the basic and production business segments experienced declines in segment profit [7][10]. Market Position and Strategy - The company is a key player in China's potash fertilizer market, acting as a negotiator for large import contracts and ensuring domestic supply [8][10]. - The strategic focus on bio-fertilizers aligns with national policies aimed at increasing efficiency and reducing chemical fertilizer usage, enhancing the company's market position [9][10].
中化化肥（00297）：股东应占溢利同比增长69.49%，公司受益于钾肥价格上涨