Chanhen(SZ:002895) Great Wall Securities·2025-09-17 13:06Investment Rating - The investment rating for the company is "Buy" with expectations of a stock price increase of over 15% relative to the industry index in the next six months [5][19]. Core Views - The company's performance in the first half of 2025 showed significant growth, with revenue reaching 3.36 billion and a year-on-year increase of 35.28%. The net profit attributable to shareholders was 536 million, up 51.54% year-on-year [1][2]. - The increase in net profit is attributed to the rise in both volume and price of key products such as calcium dihydrogen phosphate and monoammonium phosphate [2]. - The company is expanding its phosphate mining capacity, which is expected to enhance its resource advantages and support future growth [4][11]. Financial Performance Summary - Revenue projections for 2025-2027 are 69.57 billion, 79.59 billion, and 86.88 billion respectively, with net profits of 12.23 billion, 14.96 billion, and 17.59 billion [11]. - The company reported a gross margin of 31.16% in the first half of 2025, a decrease of 2.06 percentage points compared to the same period in 2024 [2]. - The company’s return on equity (ROE) is projected to increase from 12.5% in 2023 to 17.5% by 2027 [12]. Product Performance Summary - The revenue from phosphate products in the first half of 2025 was as follows: 955 million from phosphoric acid, 844 million from feed-grade calcium dihydrogen phosphate, and 715 million from monoammonium phosphate, with year-on-year increases of 27.66%, 33.22%, and 38.91% respectively [4]. - The gross margins for these products were 18.88%, 32.60%, and 44.57%, with changes of -9.53 percentage points, +4.89 percentage points, and +3.76 percentage points year-on-year [4]. Cash Flow and Financial Health Summary - The net cash flow from operating activities was -147 million in the first half of 2025, a decline of 199.53% year-on-year, primarily due to increased cash payments for raw materials [3]. - The company’s cash and cash equivalents at the end of the period were 1.631 billion, down 6.03% year-on-year [3]. - Accounts receivable increased by 44.88% year-on-year, with a turnover rate improvement from 9.54 times in 2024 to 10.10 times [3]. Technological and Competitive Advantages - The company has developed several proprietary technologies in phosphate mining and production, which are now applied in industrial production, enhancing its competitive edge [10]. - Collaborations with universities have led to advancements in environmentally friendly technologies, aligning with current environmental policies [10].