Core Viewpoint - China Heart Heart Fertilizer reported a mixed performance in Q1, with revenue growth but a significant decline in net profit, indicating challenges in the fertilizer market and the need for strategic adjustments [1][2][3] Financial Performance - The company achieved revenue of approximately 5.846 billion yuan, a year-on-year increase of 1.7% and a quarter-on-quarter increase of 2.4% [1] - The net profit attributable to shareholders was about 198 million yuan, a decrease of 30.03% year-on-year, although it marked a recovery from a loss of approximately 74.64 million yuan in the previous quarter [1] Market Dynamics - The fertilizer market is experiencing a "first suppressed then rising" trend, with prices of coal chemical products remaining low in January and February, followed by a rebound in March due to spring farming demand and improved export expectations [1] - The overall gross margin increased by nearly 3 percentage points to 14% during the period, driven by rising prices of downstream products [1] Segment Performance - The fertilizer segment generated sales revenue of approximately 3.09 billion yuan, accounting for 53% of total revenue, making it the largest revenue source for the company [1] - The chemical segment achieved sales revenue of about 2.46 billion yuan, representing 42% of total revenue, while other segments contributed approximately 290 million yuan, or 5% [1] Product Development and Strategy - The company is enhancing the sales proportion of high-efficiency compound fertilizers, with a 6% increase in sales volume and a 9% increase in product prices, leading to a 2 percentage point rise in gross margin [2] - The gross margin for humic acid reached 25%, supported by ongoing research and development [2] Future Projects - Upcoming projects include a 600,000-ton synthetic ammonia and 1.2 million-ton slow-release fertilizer project in Jiangxi, expected to be operational by Q3 2025, and a 320,000-ton melamine and 500,000-ton high-efficiency compound fertilizer project in Xinjiang, projected for completion by the end of 2026 [2] Market Outlook - The company anticipates an increase in international potassium fertilizer and grain prices due to tariff policies, alongside a shift in domestic agriculture towards precision farming, which will enhance demand for high-efficiency fertilizers [3] - The company plans to leverage policy benefits for technological upgrades and focus on functional, customized products and differentiated services to strengthen its market position as a "proponent of efficient fertilizer use" [3]

Core Viewpoint - Russia has formally requested consultations with the EU and WTO regarding the EU's Carbon Border Adjustment Mechanism (CBAM) and the EU Emissions Trading System (EU ETS), arguing that these measures are trade-restrictive and discriminatory under the guise of climate policy [1][5][9]. Group 1: CBAM and EU ETS Overview - The EU established the EU ETS in October 2003 to address "carbon leakage," which refers to the transfer of production to countries with less stringent emissions regulations [4]. - In May 2023, the EU passed regulations to establish CBAM, which aims to provide additional support measures for sectors at risk of carbon leakage [5][9]. Group 2: Russia's Concerns - Russia claims that the CBAM imposes complex and costly trade barriers on EU imports, creating significant uncertainty and unpredictability for operators [5][6]. - The application process for CBAM requires extensive documentation and proof of financial and operational capacity from importers, increasing compliance costs [6][8]. - Russia argues that the CBAM effectively acts as an additional "quasi-tariff" on imports from third countries, diverting financial resources from these countries' domestic climate change efforts [8][9]. Group 3: Economic Implications - The CBAM is expected to increase the trading costs of regulated goods significantly due to the administrative and compliance burdens imposed [6][9]. - The EU's CBAM currently applies to industries such as cement, steel, aluminum, fertilizers, electricity, and hydrogen, which are identified as having high carbon leakage risks [9]. - The EU estimates that these sectors will account for over 50% of emissions covered by the EU ETS once fully implemented, aiming to encourage production countries to reduce carbon emissions [9].

Core Viewpoint - Russia has reiterated its strong support for international efforts to combat climate change, but its recent request for consultations does not involve genuine environmental measures, rather it criticizes the EU's carbon border adjustment mechanism (CBAM) and emissions trading scheme (EU ETS) as trade-restrictive and discriminatory measures [1][8] Group 1: Russia's Position on CBAM - Russia has expressed concerns that the EU's CBAM and EU ETS are being packaged as climate measures while actually serving to enhance EU competitiveness and attract additional investments [1][6] - The CBAM is seen as creating significant trade barriers for covered goods imported into the EU, complicating and increasing the costs of compliance for operators [3][6] - Russia highlights that the EU's requirements for CBAM compliance involve extensive documentation and proof of financial and operational capacity, which adds to the administrative burden on importers [4][5] Group 2: Implications of CBAM - The mechanism requires authorized CBAM declarants to purchase and surrender a certain number of CBAM certificates, effectively imposing additional "quasi-tariff" costs on imports from third countries [7][8] - The EU's emissions trading system sets a cap on greenhouse gas emissions, with free allocation of allowances for sectors deemed at risk of carbon leakage, which Russia argues is unfairly based on export performance [7][8] - The CBAM currently applies to industries such as cement, steel, aluminum, fertilizers, electricity, and hydrogen, which are selected due to their high carbon leakage risk and emission intensity [8]

Core Viewpoint - The fertilizer market is experiencing a recovery in prices and demand, influenced by agricultural product prices, particularly in the context of the 2025 outlook for corn and soybeans [1][6]. Group 1: Fertilizer Market Dynamics - Fertilizer prices are closely linked to agricultural product prices, with a notable increase in prices for corn, soybean meal, wheat, and cottonseed meal in Q1 2024 [1]. - The overall fertilizer market showed a "first suppressed, then rising" trend during Q1 2024, with urea prices rebounding due to spring planting demand and enhanced export expectations [1][6]. - The leading fertilizer producer, China Heart-to-Heart Fertilizer, reported a 26% increase in gross profit quarter-on-quarter in Q1 2025, driven by improved supply-demand dynamics [1][6]. Group 2: Financial Performance of China Heart-to-Heart Fertilizer - In Q1 2025, China Heart-to-Heart Fertilizer's total revenue was 5.846 billion RMB, a slight increase of 1.7% year-on-year, with a quarter-on-quarter increase of 2.4% [2][6]. - The company reported a gross profit of 834 million RMB, with a gross margin of 14%, showing a quarter-on-quarter recovery despite a year-on-year decline [6]. - The company's net profit attributable to shareholders decreased by 30% year-on-year but increased by 89% quarter-on-quarter, indicating a potential turning point [2][6]. Group 3: Product Performance and Market Position - Urea revenue increased by 6.3% to 7.306 billion RMB in 2024, but the gross margin fell by 4 percentage points to 25% due to excess industry capacity and limited export opportunities [3][4]. - The methanol and DMF products performed well, with methanol revenue rising by 14.5% to 2.678 billion RMB and DMF revenue increasing by 14% to 1.192 billion RMB [4]. - The company is expanding its production capacity significantly, with plans to increase total fertilizer capacity to over 13 million tons by 2027, positioning itself as the largest fertilizer producer in China [7][9]. Group 4: Market Challenges and Competitive Landscape - The fertilizer market faces high competition due to the large number of participants and the homogeneity of basic fertilizer products, leading to strong bargaining power for consumers [8]. - The need for continuous capital investment in production facilities is essential for achieving economies of scale, which can increase profitability pressure during significant price fluctuations [8]. - The company’s expansion strategy is driven by concerns over keeping pace with industry growth, despite the current volatility in product prices [9].

Financial Data and Key Metrics Changes - Sales for Q1 2025 were $1,767 million, up 2% year over year and up 10% quarter over quarter [6] - Consolidated adjusted EBITDA was $359 million, with specialties driven EBITDA of $262 million, up 7% year over year and 4% quarter over quarter [7] - Specialties driven EBITDA margin improved by approximately 70 basis points to 19% compared to the first quarter of last year [7] Business Line Data and Key Metrics Changes - Industrial Products sales were $344 million, up 3% year over year, with EBITDA of $76 million, up 6% [9] - Potash division reported sales of $405 million and EBITDA of $118 million, with average potash price at $300 CIF per ton, down year over year but up $15 per ton from the previous quarter [11] - Phosphate Solutions division had sales of $573 million, up 3%, and EBITDA of $139 million, with an EBITDA margin of 24% [13] - Growing Solutions division sales were $495 million, up 3% year over year, with EBITDA of $47 million, an increase of 12% [16] Market Data and Key Metrics Changes - Inflation rates were stable in the U.S. and EU, while Brazil saw a 30 basis point increase; China experienced a slight negative inflation of 0.1% year over year [20] - Grain price index increased slightly, with corn, wheat, and soybean prices improving; corn saw the largest quarterly gain [23] - Potash prices increased approximately 9% sequentially, while phosphate prices grew by about 4% [24] Company Strategy and Development Direction - The company aims to drive growth in specialty businesses to differentiate from commodity-based peers and maximize potash sales volumes [34] - Innovation remains a key focus, with plans to develop new products and solutions for existing and new clients [36] - The acquisition strategy continues, with recent acquisitions enhancing regional market presence and local production capabilities [37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market prices and stable supply, but cautioned about the impact of fulfilling lower-priced contracts with China and India [49] - The company maintains its 2025 guidance, expecting EBITDA for specialties driven divisions to be between $950 million to $1,150 million [32] - There is an expectation for higher potash prices, but the company has not made guidance concessions for potential tariffs [33] Other Important Information - The company ended the quarter with available resources of approximately $1,500 million and a net debt to adjusted EBITDA ratio of 1.2 times [31] - A recent management change in the Phosphate Solutions division aims to maintain market share and target geographic expansion [15] Q&A Session Summary Question: Insights on potash trade flows and pricing impact - Management noted that Eurasian players have been inconsistent in their production claims, making it difficult to predict market tightness and pricing impacts [48] Question: More details on the mix shift in Brazil and growing solutions - Brazil's B2B and B2C businesses are performing well, with strong specialty growth attributed to previous acquisitions [52]

国元证券股份有限公司 关于中盐安徽红四方肥业股份有限公司 首次公开发行网下配售限售股上市流通的核查意见 国元证券股份有限公司（以下简称"国元证券"、"保荐机构"）作为中盐安徽 红四方肥业股份有限公司（以下简称"红四方"、"公司"）首次公开发行股票持续 督导阶段的保荐机构，根据《证券发行上市保荐业务管理办法》《上海证券交易 所股票上市规则》 根据中国证券监督管理委员会《关于同意中盐安徽红四方肥业股份有限公司 首次公开发行股票注册的批复》（证监许可2024255 号），并经上海证券交易所 同意，中盐安徽红四方肥业股份有限公司（以下简称"公司"）首次公开发行人民 币普通股（A 股）5,000 万股，并于 2024 年 11 月 26 日在上海证券交易所主板上 市交易。公司首次公开发行股票完成后，总股本为 200,000,000 股，其中有限售 条件流通股 159,650,435 股，占公司总股本的 79.83%，无限售条件流通股 本次上市流通的限售股为公司首次公开发行网下配售限售股，股份数量为 发行股票并上市之日起 6 个月，具体内容详见公司于 2024 年 11 月 21 日在上海 证券交易所网站（www.sse ...

Investment Rating - The investment rating for the basic chemical industry is "Positive" (maintained) [1] Core Viewpoints - The report highlights the stability of the phosphate rock market and the significant price difference between domestic and international phosphate fertilizers, indicating a positive outlook for integrated phosphate chemical companies in terms of profitability and dividend increases [3] - The report emphasizes the supply-side disturbances in glyphosate, with current product prices and profit margins under pressure due to historical lows. It suggests that overseas supply disruptions combined with domestic industry adjustments could improve competitive dynamics and enhance the bargaining power of leading companies [5][24] Summary by Sections Industry Trends - The chemical industry index outperformed the CSI 300 index by 0.7% this week, with 63.9% of chemical stocks showing weekly gains [10][18] - The CCPI (China Chemical Product Price Index) increased by 3.78% to 4175 points as of May 15 [21] Key Product Tracking - The report notes a decrease in inventory days for polyester filament, with prices for POY, FDY, and DTY rising significantly [34][35] - Domestic urea prices have also increased, driven by export policy expectations [34] Recommended and Beneficiary Stocks - Recommended stocks include leading companies such as Xingfa Group, Yangnong Chemical, and Hebang Biotechnology in the glyphosate sector [5][24] - Beneficiary stocks include Jiangshan Co., New安股份, and Guangxin Co. [5][24] Glyphosate Supply and Pricing - Global glyphosate production capacity is 1.18 million tons per year, with China accounting for 68.6% of this capacity. Major domestic producers include Xingfa Group, Fuhua Chemical, and Xin'an Co. [26][30] - Glyphosate prices have been declining, with current prices and price differentials at historically low levels [30][32]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints - The urea spot price will move in the direction of ensuring supply and stabilizing prices, and the urea futures price is expected to fluctuate around the spot price. The consensus on ensuring supply and stabilizing prices in the urea industry chain has laid a solid foundation for the stability of domestic urea spot prices [5]. 3. Summary by Directory 3.1 Urea and Related Product Prices - **Domestic Urea Spot Price**: Plots show the price trends of urea in regions like Henan, Shanxi (small and large particles), and Sichuan from 2021 - 2025 [8][9]. - **International Urea Price and Spread**: Illustrates the FOB prices of small - particle urea in China and the Middle East, as well as the profit of Shandong factory for small - particle urea and the cost difference between the Middle East and Shandong factory from 2021 - 2025 [11][12]. - **Unit Nitrogen Element Price and Spread**: Displays the price of nitrogen in synthetic ammonia in Hubei, ammonium chloride in Henan, and the spread between liquid ammonia - urea and urea - ammonium chloride from 2021 - 2025 [14][15]. - **Phosphate and Potassium Fertilizer Prices**: Presents the price trends of monoammonium phosphate, diammonium phosphate, 60% potassium fertilizer, and 62% port potassium fertilizer in Hubei from 2021 - 2025 [17][18]. - **Urea Futures Basis and Inter - month Spread**: Shows the price of the urea 09 - contract futures, the basis of the 09 - contract, and the 9 - 1 spread from 2021 - 2025 [20][21]. 3.2 Urea Supply - **Domestic Urea Output**: Shows the weekly average daily output, cumulative output since the beginning of the year, weekly average daily output of natural - gas - based and coal - based urea from 2021 - 2025. From May 8 - 14 to May 29 - June 4, 2025, the weekly average daily output increased from 19.92 to 20.43 million tons [25][26]. - **Coal Price and Urea Profit**: Displays the price trends of anthracite and bituminous coal, as well as the profits of Shanxi fixed - bed and Henan new - process urea production from 2021 - 2025 [28][29]. - **Urea Factory Inventory and Apparent Consumption**: Illustrates the enterprise inventory, daily average apparent consumption from the enterprise perspective, order volume, and domestic daily average apparent consumption of urea from 2021 - 2025. As of a certain period, the total inventory of Chinese urea enterprises was 81.72 million tons, a decrease of 24.84 million tons (- 23.31%) [31][32]. 3.3 Urea Demand - **Compound Fertilizer**: Shows the compound fertilizer enterprise's operating rate, inventory, import, export, and net export volume from 2021 - 2025. The domestic compound fertilizer capacity utilization rate rebounded slightly to 40.26%, a month - on - month increase of 2.36% [36][37]. - **Compound Fertilizer Upstream**: Displays the weekly output, domestic supply volume, and cumulative domestic supply volume of monoammonium phosphate and diammonium phosphate, as well as the operating rate, port inventory, domestic supply volume, and cumulative domestic supply volume of domestic potassium fertilizer from 2021 - 2025 [38][39][42]. - **Melamine**: Presents the weekly output, price, melamine/urea price ratio, and domestic net retention volume of melamine from 2021 - 2025 [44][45]. - **Urea Export**: Shows the monthly and cumulative export volume of urea from 2021 - 2025 [47][48]. 3.4 Urea Inventory - **Enterprise and Port Inventory**: Illustrates the enterprise inventory, port inventory, total enterprise + port inventory, and the number of urea warehouse receipts from 2021 - 2025 [49][50].

长江期货尿素&甲醇周报 长江期货股份有限公司交易咨询业务资格：鄂证监期货字【2014】1号 【产业服务总部 | 能化产业服务中心】 研 究 员：曹雪梅 执业编号：F3051631 投资咨询号：Z0015756 张 英 执业编号：F03105021 投资咨询号：Z0021335 2025-05-19 4 重点关注：复合肥开工情况、尿素装置减产检修情况、出口政策、煤炭价格波动 01 尿素：上方压力显现 关注支撑位表现 02 甲醇：下游需求承接有限 高位回落 目 录 01 核心观点总结 尿素：上方压力显现 关注支撑位表现 01 1 市场变化：尿素价格延续震荡运行，盘面价格重心小幅下移，5月16日尿素2509合约收盘价1892元/吨，较上周收 盘基本持平。尿素现货价格坚挺，河南市场日均价1907元/吨，较上周上调23元/吨，山东市场日均价1946元/吨， 较上周上调76元/吨。 2 基本面变化：供应端尿素开工负荷率87.5%，较上周基本持平，其中气头企业开工负荷率75.74%，较上周上调 5.45个百分点，尿素日均产量19.92万吨。新疆新冀能源150万吨/年装置试车成功，日产1560吨小颗粒尿素和 1098吨大颗粒 ...

Core Viewpoint - The development of green ammonia and green methanol is essential for addressing high carbon emissions in traditional industries like energy and petrochemicals, as well as for meeting domestic and international low-carbon transition pressures [1][2]. Group 1: Industry Context - China's synthetic ammonia and methanol production contributes approximately 220 million tons of carbon emissions, accounting for 50% of the chemical industry's total emissions, making it a key area for reduction efforts [2]. - The EU's "Fit for 55" package and the upcoming carbon border adjustment mechanism (CBAM) will impose significant export pressures on industries, including fertilizers and hydrogen, highlighting the urgency for green ammonia and methanol development [2]. Group 2: Current Challenges - The green ammonia and methanol industry in China is still in the market cultivation stage, facing challenges in technology, market readiness, and economic viability [4]. - The production processes, including electrolysis and biomass routes, have technical limitations, such as unstable renewable energy resources and high costs associated with hydrogen storage and transportation [4]. - Economic feasibility remains a concern, as the cost of hydrogen production via electrolysis is currently 2 to 3 times higher than coal-based methods unless electricity prices drop significantly [4]. Group 3: Future Opportunities - The decline in costs for solar panels and smart technology is expected to lower the price of renewable energy, with wind and solar electricity costs currently around 0.05 to 0.06 yuan per kilowatt-hour [6]. - The industry is encouraged to explore new technological pathways and collaborate with local renewable energy enterprises to secure cheaper electricity [7]. - The government is advised to maintain a rational approach in project approvals, allowing for pilot projects in specific regions to prevent investment waste [7]. Group 4: Strategic Recommendations - Industry players should accelerate the operationalization of existing green ammonia and methanol projects while avoiding superficial promotion without substantial construction [7]. - Continuous improvement of standards for green ammonia and methanol is necessary, with existing standards already published by the China Fertilizer Association [7].