Chuanheng shares in the first half of the net profit increased by 46.09% year-on-year The fixed increase project will have an advantage in the global feed phosphate market

Source: Securities Daily

On July 18, Chuanheng Co., Ltd. released its 2020 interim report, achieving operating income of 805 million yuan in the first half of 2020, an increase of 1.06% year-on-year; net profit attributable to shareholders of listed companies of 82.8275 million yuan, an increase of 46.09% year-on-year; and deducting non-net profit of 79.8441 million yuan, an increase of 27.09% year-on-year.

Chuanheng shares said that the main reason for the change in operating performance compared with the same period last year is the decline in the price of major raw materials in the first half of the year, so the cost of major products has declined, although the unit price of sales has also decreased, but it is not as large as the decline in costs, so the gross profit margin increased year-on-year, and the expenses during the period also decreased year-on-year, and the operating performance increased year-on-year.

Enrich upstream mineral resources

Reduce product costs

The main business of Chuanheng Co., Ltd. is the production and sales of phosphoric acid and phosphate products, and the domestic market share and export quantity of its terminal product feed grade calcium dihydrogen phosphate are in the first place in the industry. Phosphate ore, sulfuric acid and sulfur are the main raw materials required for the production of Chuanheng Shares.

The financial report shows that in 2016, 2017, 2018 and January to September 2019, the total purchase amount of phosphate ore, sulfuric acid and sulfur of Chuanheng shares accounted for 51%, 57%, 52% and 60% of the total procurement, accounting for a relatively high proportion. According to the data monitoring of the business agency, as of July 18, the average market reference price of 30% grade phosphate ore was 380 yuan / ton, down 6.56% from May 9. That is to say, the supply and price fluctuations of phosphate ore, sulfuric acid and sulfur will directly affect the continuity and operating performance of Chuanheng shares.

In order to increase the company's bargaining power in the procurement of raw materials, Chuanheng Group, the controlling shareholder of Chuanheng Shares, acquired 90% of the equity of Fuquan Phosphate Rock, the largest phosphate mining enterprise in Fuquan area, and promised to transfer its equity or assets in Fuquan Phosphate Rock to the Company or the Company's holding subsidiary after fulfilling the required procedures within 36 months. At that time, Chuanheng shares will have 3 mining rights, phosphate ore resources reserves of about 190 million tons, with a production scale of 1.5 million / ton (2.5 million tons / year after the technical transformation), which can fully meet the production needs.

Li Jian, secretary of the board of directors of Chuanheng Shares, told the Securities Daily reporter that it is expected that after the integration of all phosphate rock resources of the company is completed, the phosphate rock resources controlled or jointly controlled by the company will reach 560 million tons, and the rich reserves of upstream phosphate rock resources will provide high-quality and sufficient resource guarantees for the development of the company's phosphorus chemical industry.

Feed grade calcium dihydrogen phosphate

The market space is huge

In addition to the continuous good operation, Chuanheng shares are actively promoting refinancing matters, on June 5, Chuanheng shares received the approval issued by the China Securities Regulatory Commission, formally reviewed and approved its 2019 non-public issuance of no more than 80.002 million A-share shares, the total amount of funds raised by the issuance does not exceed 1.03941 billion yuan (including issuance costs), mainly for the construction of 200,000 tons / year hemi-water - dihydrate wet phosphoric acid and deep processing project, after the completion of the fundraising project, The feed grade calcium dihydrogen phosphate will be added to the annual production of 147,500 tons.

China is currently the world's second largest feed producer after the United States, in the domestic market, feed grade calcium dihydrogen phosphate is mainly used as an aquatic feed additive, while livestock feed additives are mainly used feed grade calcium hydrogen phosphate; in foreign markets, feed grade dihydrogen phosphate has been widely used in aquatic feed and livestock feed.

Industry insiders told the "Securities Daily" reporter that feed grade calcium dihydrogen phosphate is a weak acidic product, which has a positive effect on the establishment of beneficial bacteria in the gastrointestinal tract, makes the animal intestine healthier, and has a very obvious effect on improving animal immunity and promoting the absorption and utilization of nutrients. And because of the high effectiveness of calcium dihydrogen phosphate, phosphorus is absorbed more, and the phosphorus naturally discharged into the feces is reduced a lot, which is more friendly to the breeding environment.

Zhang Haibo, head of marketing of Chuanheng shares, believes that the price of feed-grade dihydrogen phosphate in the domestic market is lower than that of feed-grade calcium dihydrogen phosphate, and at the same time, livestock manure has not paid enough attention to water pollution, and the market space for feed-grade calcium dihydrogen phosphate has not been fully opened. With the country's strict control of water pollution in livestock and poultry breeding, it is believed that calcium dihydro will usher in a better and healthier future.

According to the data, the existing calcium dihydrogen phosphate production capacity of Chuanheng Co., Ltd. has been maintained at about 300,000 tons in recent years, which means that the overall calcium dihydrogen phosphate production capacity will increase by about 50% after completion. For sales channels, Zhang Haibo said: "Through nearly 20 years of efforts, the company has formed a combination of direct sales and distribution, international and domestic mutual support of the marketing strategic layout, the products sell well in more than 50 countries and regions around the world, and Chia Tai, Cargill, Tongwei, Haida, New Hope Liuhe and many other international and domestic famous feed breeding enterprises, as well as the feed breeding leading enterprises in many regional markets around the world to establish a long-term and stable strategic cooperative relationship, to be raised when the project is completed and gradually reached production, We are well positioned to absorb the capacity of our investment projects and establish a new competitive advantage in the global feed phosphate market. (Trainee reporter Xu Yanxiong)