Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.5, indicating a potential upside of 54% from the current price of HKD 4.2 [6][4]. Core Insights - The company achieved a revenue of RMB 23.13 billion in 2024, a slight decrease of 1% year-on-year, while the net profit attributable to shareholders increased by 23% to RMB 1.46 billion [2][4]. - The company has announced a dividend policy for 2025-2027, committing to a distribution rate of no less than 25% of audited net profit and a minimum dividend of RMB 0.24 per share [2][4]. - The report anticipates net profits for 2025-2027 to reach RMB 1.1 billion, RMB 1.88 billion, and RMB 2.82 billion, reflecting year-on-year changes of -25%, +71%, and +50% respectively [4][6]. Revenue and Profit Analysis - Urea revenue was RMB 7.31 billion, up 6% year-on-year, but prices fell by 17% due to increased industry capacity and export restrictions, leading to a 4 percentage point decline in gross margin to 25% [3]. - Compound fertilizer revenue decreased by 2% to RMB 6 billion, with a gross margin increase of 2.1 percentage points to 15% [3]. - Methanol revenue rose by 15% to RMB 2.68 billion, with a gross margin increase of 9.2 percentage points to 8.6% [3]. - The company is facing an oversupply issue in the urea market, with an expected addition of 6.6 million tons of capacity in 2025 [3]. Capacity Expansion - The company is expanding its production capacity, with several projects coming online, including a 60,000-ton formaldehyde project and a 300,000-ton compound fertilizer project [4]. - By the end of 2027, the company's fertilizer production capacity is expected to exceed 13 million tons, making it the largest fertilizer producer in China [4].
中国心连心化肥：逆势扩张，长远布局-20250402