Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.5, indicating a potential upside of 49% from the current price of HKD 4.4 [7]. Core Views - Short-term performance fluctuations do not alter the long-term value of the company, with projected net profits for 2025-2027 expected to be RMB 1.0 billion, RMB 1.76 billion, and RMB 2.6 billion, respectively, reflecting a year-on-year change of -32%, +76%, and +48% [4][5]. Revenue and Profit Analysis - In Q1 2025, the company achieved revenue of RMB 5.85 billion, a year-on-year increase of 1.7%, while net profit was RMB 200 million, down 30% year-on-year [2][4]. - Urea revenue was RMB 1.54 billion with a sales volume of 965,000 tons, maintaining year-on-year levels, but the price decreased by 23% to RMB 1,592 per ton, leading to a gross margin drop of 13 percentage points to 18% [3]. - Compound fertilizer revenue reached RMB 1.56 billion with a sales volume of 600,000 tons, a 14% increase year-on-year, while the price fell by 4% to RMB 2,599 per ton, maintaining a gross margin of 14% [3]. - Methanol revenue was RMB 800 million with a sales volume of 354,000 tons, a 22% increase year-on-year, and a price increase of 4% to RMB 2,270 per ton, resulting in a gross margin rise of 4 percentage points to 10% [3]. - The company expects a total demand for urea in China to be 69 million tons in 2025, with agricultural demand at 43 million tons and industrial demand at 22 million tons, reflecting growth rates of 3% and 5%, respectively [4]. Market Dynamics - The report highlights that changes in export policies from comprehensive restrictions to structured adjustments will significantly impact demand, with an expected export volume of 4 million tons in 2025, a staggering increase of 1,438% [4]. - The report emphasizes that the relaxation of export policies will help alleviate domestic urea supply surplus issues [4].
中国心连心化肥（01866）：短期业绩波动不改长期价值