Xingfa: Its own mines show cost advantages, the price of phosphate ore is strong, and the prosperity of the main product is expected to increase

The performance of 2023Q4 continued to improve quarter-on-quarter, and achieved significant quarter-on-quarter growth for two consecutive quarters 

Since the third quarter, the market of the agricultural chemical sector has gradually recovered, and the profitability of products has been enhanced, which has driven the operating performance of Xingfa Group Company to achieve significant quarter-on-quarter growth for two consecutive quarters. In the fourth quarter of 2023, the company is expected to achieve a net profit of 426 million yuan to 526 million yuan, an increase of 31.0% to 61.8%. In addition, the company's specialty chemicals segment was relatively unaffected by the macroeconomic impact and generally maintained a steady development trend, which was an important source of the company's performance during the year.

The price of phosphate ore is still strong, and the peak season for agricultural chemical products is expected to boost the prosperity of the phosphorus chemical industry chain 

In terms of phosphate ores, affected by factors such as the decline in the grade of minable phosphate ores and the growing demand for new downstream areas, the price of domestic phosphate ores has remained high in the past two years, and the resource scarcity attribute of phosphate ores has become increasingly prominent. As of March 2, 2024, the tax inclusive price of 30% grade phosphate rock ship plate in Hubei is 1030 yuan/ton.

In terms of Glyphosate, the current market price of Glyphosate is stable and the demand is stable. As of March 3, the average market price of 95% Glyphosate TF in East China is 25,500 yuan/ton; Generally speaking, March/April is the export season of pesticide products in China, and the current global pesticide product inventory cycle is gradually coming to an end, and the number of exports to South America, Southeast Asia and other places has returned to the normal range, so we expect the Glyphosate industry prosperity is expected to stage a rebound.

In phosphate fertilizer, February and March is the domestic spring cultivation fertilizer season, the primary job of domestic fertilizer enterprises is to ensure the supply of stable prices, since then domestic demand fell back, May/June is the traditional export season of phosphate fertilizer, the recent domestic phosphate fertilizer export policy landing, phosphate fertilizer export quota compared with last year basically flat, The international price of phosphate fertilizer is affected by uncertain factors such as India's procurement strategy and Red Sea transportation. As of March 1, the domestic market price of mono-ammonium phosphate is 3050 yuan/ton, and the market price of diammonium phosphate is 3668 yuan/ton, and the gross profit level of phosphate fertilizer has improved significantly since late February.

In general, the company's phosphate ore is mainly used for self-use, continue to produce yellow phosphorus, phosphate fertilizer, Glyphosate and other downstream high value-added products, in the background of domestic phosphate ore prices remain high, the company because of its own mines brought cost advantages continue to highlight, in addition, the current demand for agricultural products peak season, the company's main agricultural products boom is expected to increase.　

A number of projects in the growth sector are steadily advancing, and long-term growth is promising 

In the new materials, new energy sector, the company steadily promoted Hubei Xingyou’s phase I of 300,000 t/a iron phosphate and phase I of Hubei Youxing’s 300,000 tons/year lithium iron phosphate, Hubei Ruijia 50,000 tons/year photovoltaic glue and Hubei Xingrui 30,000 tons/year liquid glue, Sinophorus 30,000 tons/year electronic grade phosphoric acid, 20,000 tons/year electronic grade etching liquid, 40,000 tons/year ultra-high purity electronics Chemicals and a series of high-growth projects.

According to the company announcement, on September 3, 2023, Hubei Xingyou of Phase 1 100,000 tons/year iron phosphate production line has been officially put into full operation, and Hubei Xingyou's first 30 tons of iron phosphate products have also been sent to downstream lithium iron phosphate manufacturers for small-batch product verification tests. In addition, the company in the black phosphorus, aerogel, silicone microcapsules and other new material products are doing from 0 to 1 industrial scale-up development, the next 1-2 years is expected to become the company's new rapid profit growth point.

In the agrochemical sector, the EIA announcement of the company's subsidiary of L-Glufosinate atechnical and formulation project and Xingchen's annual output of 50,000 tons of 2, 4-drop project has been publicized successively. The company is expected to gradually expand the product layout of the agrochemical sector by means of its accumulation in the field of Glyphosate and continue to expand its influence in the agrochemical industry.