Core Viewpoint - The company has shown strong performance in Q2 with significant revenue and profit growth, and is expected to experience explosive growth in 2026 and 2027 due to capacity expansion and strategic upgrades in marketing and services [1][2][3] Financial Performance - In Q2, the company's revenue reached 6.82 billion, a quarter-on-quarter increase of 16.7%, and net profit attributable to shareholders was 400 million, a substantial quarter-on-quarter increase of 102.5% [1] - For the first half of the year, total revenue was 12.67 billion, a year-on-year increase of 5%, while net profit attributable to shareholders was 600 million, a year-on-year decrease of 13% [1] - The decline in net profit is primarily attributed to the drop in coal prices, which weakened support for urea prices, leading to a 15.9% year-on-year decrease in urea revenue to 3.23 billion and a 19% decrease in urea prices [1] Capacity Expansion - The company is set to launch significant new production capacities, which will be the main driver of performance. By 2025, the revenue breakdown is projected to be 54% from fertilizers, 35% from chemicals, 2% from gases, and 6% from other businesses [2] - Upcoming projects include the Jiangxi Phase II expected to start production in September 2025, the Henan urea project in early 2026, the Xinjiang project by the end of 2026, and the Guangxi project in the first half of 2027 [2] - Once all projects are completed, urea production capacity is expected to exceed 8 million tons, compound fertilizer capacity to exceed 6 million tons, and total fertilizer capacity to reach 14 million tons [2] Marketing and Service Upgrades - In 2025, the company will upgrade its brand positioning from "China's Efficient Fertilizer Advocate" to "China's Efficient Fertilizer Usage Advocate" to better meet market trends and farmer needs [2] - This transition aims to shift from merely selling products to providing comprehensive planting solutions, which is expected to enhance the sales of the company's efficient fertilizers [2] Investment Recommendation - The company is expected to maintain a steady pace of capacity expansion and retain its industry-leading position, with projected net profits for 2025-2027 adjusted to 1.15 billion, 1.65 billion, and 2.49 billion respectively, reflecting year-on-year changes of -21.5%, +43.8%, and +51.1% [3] - The target price has been raised to 9.0 HKD, representing a 32% upside potential from the current price, with a buy rating [3]