Chanhen(SZ:002895) Guoxin Securities·2025-12-12 11:16Investment Rating - The report assigns an "Outperform" rating to the company for the first time, with a fair value range of 36.73 to 43.21 CNY per share, indicating a 22% premium over the current stock price of 35.35 CNY [5][3]. Core Insights - The company is a leading player in the phosphate chemical industry in China, leveraging high-quality phosphate rock resources to establish a strong competitive advantage. It has a comprehensive industrial chain that integrates mining and processing [13][19]. - The company has a total designed production capacity of 510,000 tons per year for feed-grade dicalcium phosphate, making it the largest producer globally. The supply-demand balance in the industry is tightening, with product prices expected to stabilize and gradually increase from 2023 onwards [2][38]. - The company is also focusing on high-purity ammonium phosphate for fire safety applications, benefiting from stringent national fire safety standards and high added value [2][38]. - The demand for phosphate rock is expected to increase due to the growth of the energy storage sector, with significant increases in global battery shipments projected from 2025 to 2027 [2][38]. Financial Forecast and Valuation - The company is projected to achieve net profits of 1.313 billion CNY, 1.526 billion CNY, and 1.755 billion CNY for the years 2025, 2026, and 2027, respectively. The corresponding earnings per share are expected to be 2.16 CNY, 2.51 CNY, and 2.89 CNY [3][4]. - The report anticipates a steady increase in revenue, with total revenue expected to reach 7.45 billion CNY in 2025, reflecting a 26.1% year-on-year growth [4][3]. - The company's EBIT margin is projected to improve from 23.5% in 2025 to 27.5% in 2027, indicating enhanced profitability [4][3]. Industry Overview - The phosphate chemical industry in China is characterized by high resource barriers and strong supply constraints, with the company positioned to benefit from these dynamics [3][19]. - The company has developed a complete product system covering five major sectors, including basic raw materials, new energy materials, and traditional feed additives, which supports its strategic transition towards diversified markets [19][20]. - The company has been actively expanding its international market presence, with international sales increasing from 373 million CNY in 2017 to 1.845 billion CNY in 2024, reflecting its growing operational capabilities [22][20].