Potash concept expects to erupt

The price has bottomed out, and the concept of potash fertilizer is expected to explode. Jin Zhengda's existing compound fertilizer production capacity totals 4.2 million tons, of which the controlled release fertilizer has an effective production capacity of 1.5 million tons, ranking first in the industry; it is expected to have a production capacity of 2.4 million tons of compound fertilizer in 14 years. Controlled release fertilizer 1.8 million tons, nitro compound fertilizer 1.8 million tons, water soluble fertilizer 400,000 tons; currently the company's production base is located in Linyi, Shandong, Shandong Heze, Anhui, Henan, the future will soon expand to Liaoning, Guizhou, sales network layout nationwide .

The rate of compounding has increased year by year, and industry concentration has increased year by year. Benefit farmers policy + planting structure change + channel flattening effectively promotes the compounding rate to increase year by year. If China's compounding rate reaches 40% in 2015, the amount of compound fertilizers used in the next five years can be maintained at 6.8%; China The concentration of the compound fertilizer industry is relatively low, and the market share of the top ten compound fertilizer companies is only 25%, which is far lower than 40% of European compound fertilizer leader YARA (in the European market). The future will have the advantages of capital, brand and channel advantages. Enterprises can quickly expand the survival space of small businesses to increase the concentration of the compound fertilizer industry.

The multi-brand precise positioning helps the rapid expansion of channels, and dealer incentive policies enhance channel control. The company has a total of five brands, of which Woft (accounting for approximately 50% of revenue) and Kim Jung-da (accounting for approximately 20%) are traditional distributors. The former positions field crop fertilizers, while the latter positions high-end cash crops. (accounting for 25%) corresponds to postal channels; currently, the company is committed to multi-brand precise positioning, and in the future, it can achieve rapid expansion of channels for different brand refinement channels; at the same time, the company helps the outstanding distributors become bigger and stronger and through marketing. The changes will bind the interests of distributors and companies, strengthen the control of channels, and effectively stimulate the rapid growth of sales.

The company has entered a period of rapid expansion of production capacity, and diversified products will drive rapid growth in the future. The effective capacity growth rate for 2011-2014 is 40%, 38%, and 10%, respectively. New capacity will be controlled in the future with controlled-release fertilizer, nitro-complex fertilizer, water-soluble fertilizer, and other new fertilizers with higher gross margins. The annual gross profit margin of the company will show a steady increase or rise; in the traditional market with capacity expansion, the planting structure in Henan is similar to that in Shandong, and the compounding rate is far lower than Shandong; the fertilizer consumption in Hebei and Jiangsu ranks first, but the compounding rate is There is a big gap in 40% of the national plan; the potential for capacity expansion is similar to that of Jilin Province in the Liaoning Province, but the compounding rate is far lower than Jilin Province (34% in Liaoning, 53% in Jilin), Henan, Hebei, The market for compound fertilizers in Jiangsu and Liaoning provinces is relatively large; the potential markets in Guizhou and Guangdong and Guangxi account for a relatively high proportion of economic crops, and the demand for high-end fertilizers is relatively large; in the future, with the rapid expansion of capacity channels, diversified products will drive rapid growth in business performance. The 2012-2014 EPS of the company was 0.77, 1.06, and 1.37 yuan respectively. According to the latest closing price of 14.29 yuan, the corresponding PE was 18.64, 13.50, and 10.46 respectively, and the target price for the next 6-12 months was 17 yuan, giving a "recommended" rating. .