After trading on January 29, Stanley (002588., a leading domestic compound fertilizer companySZ) released its 2023 annual performance forecast, and during the reporting period, the company expects to achieve a net profit attributable to shareholders of listed companies of 6$3.9 billion 70.5 billion yuan, a year-on-year increase of 45% 60%; Net profit after deducting non-profit 56.8 billion yuan 62.8 billion yuan, a year-on-year increase of 40% 55%; Basic earnings per share was 055 yuan share 0$61 shares.
Regarding the performance changes, Stanley said that during the reporting period, the production and sales of the company's products continued to improve steadily, and the growth of sales volume and the improvement of gross profit space effectively pushed up the company's profits, making profits increase significantly year-on-year. In addition, the company's profitability was further enhanced by the solid performance of sales of high-margin core products.
Buyback write-offs boost investor confidence
Stanley's main business is the R&D, production and sales of compound fertilizers, and the company's main products include high-tower chlorine-based compound fertilizers, high-tower sulfur-based compound fertilizers, drum chlorine-based compound fertilizers, drum sulfur-based compound fertilizers and other series of compound fertilizers. Among them, Stanley's "San'an" brand compound fertilizer is one of the largest brands in the country in terms of single brand sales of compound fertilizer, and has won many awards such as "China's farmers' favorite agricultural brand", "China's top 20 best-selling agricultural brand", "China's chemical excellent brand" and many other awards.
On January 22, 2024, based on the confidence in the company's future high-quality and sustainable development and the recognition of the company's intrinsic value, while safeguarding the interests of investors and boosting investors' confidence in the company's investment, Stanley announced that it intends to use its own funds of 30 million yuan and 50 million yuan to repurchase**, and all the repurchased shares will be cancelled to reduce the registered capital, and the repurchase** will not exceed RMB 7 shares (inclusive).
It is worth mentioning that on January 26, Stanley has completed the first share repurchase of the company. According to the announcement, on the same day, the company repurchased 126 shares through a centralized bidding transaction for the first time through a special ** account for share repurchase560,000 shares, accounting for 0 percent of the company's current total share capital11%, of which, the highest transaction price was 633 yuan shares, the lowest transaction price is 630 yuan shares, the total transaction amount is 798910,000 yuan. Industry insiders said that the repurchase and cancellation of share capital will play a significant role in enhancing the intrinsic value of the company's first share per share and boosting investor confidence, which will promote the company's stock price to return to a reasonable level.
In addition, Stanley has always attached great importance to returns to investors, and the company has implemented dividends for 12 consecutive years. According to Flush iFinD data, as of the third quarter of 2023, Stanley has achieved a cumulative net profit of 48 net profit attributable to the parent company since its listing6.7 billion yuan, cash dividends 12 times, cumulative cash dividends of 87.2 billion yuan, with a dividend rate of 1791%。The total amount of funds raised by Stanley in its IPO in 2011 was 1137.5 billion yuan, the company's total dividends have reached 76% of the total funds raised66%, which fully reflects the company's great importance to investor returns.
It is worth noting that the current Stanley stock price is still at a low valuation, and Flush ifind data shows that as of January 30, 2024**, the company's stock price is at 602 yuan shares, with a price-to-earnings ratio (TTM) of 1173 times, located at 357% quantile, valuations at historically low levels. In addition, Stanley's current price-to-earnings ratio is also lower than the industry average, and the current average price-to-earnings ratio (TTM) of the industry is 1587 times, compared to the company's valuation level, there is still room for appreciation.
Policies promote the high-quality development of the phosphorus chemical industry
In the case of the continuous stabilization of the main business of compound fertilizer, in recent years, Stanley has set foot in the field of upstream raw materials and other phosphorus chemical products with concentrated profits through the "north-south layout", and opened up non-fertilizer business as the second growth point of performance while further saving production costs, so as to realize the industrial layout of phosphorus chemical industry, phosphate fertilizer, compound fertilizer and iron phosphate.
Since 2021, Stanley has invested in the construction of "North and South Phosphorus Chemical" projects in Chengde, Hebei Province and Songzi, Hubei Province, respectively. Among them, the Lihe fertilizer project in Chengde, Hebei Province invested 64.5 billion yuan, including 900,000 tons of high-end compound fertilizer and supporting projects, 60,000 tons of new high-end water-soluble fertilizer projects, 40,000 tons of green and efficient foliar fertilizer projects, the project is progressing smoothly.
In the southern region, Stanley signed a cooperation agreement with Hubei Yihua Songzi Fertilizer Industry in June 2022, with a total investment of 44700 million yuan to build new energy material precursor iron phosphate and supporting projects. The project plans to build four 50,000 tons of iron phosphate production units totaling 200,000 tons, and is currently building one of the 50,000 tons of equipment, the project is progressing smoothly, the company mentioned in the annual report performance forecast, during the reporting period, the promotion of the construction of Songzi new project led to a year-on-year increase in the cost of Songzi new materials company.
On December 6, 2023, the Stanley National Excellent Distributor Summit was grandly held, and outstanding dealers from all over the country gathered together to visit the Stanley Songzi Million Ton Phosphorus Chemical Base. Stanley said that the official completion of the two million tons of phosphorus chemical industry in the north and south marks the formation of the whole industrial chain of Stanley, which will bring stronger competitiveness to the enterprise, bring more tangible benefits to dealers, and provide a steady stream of development momentum for China's agriculture.
The phosphorus chemical industry chain is regarded as Stanley's second growth engine, and the policy side is also promoting the high-quality development of the phosphorus chemical industry. On January 3, 2024, the Ministry of Industry and Information Technology, the Ministry of Industry and Information Technology and other eight departments jointly issued the "Implementation Plan for Promoting the Efficient and High-value Utilization of Phosphorus Resources", proposing that by 2026, the sustainable guarantee capacity of phosphorus resources will be significantly enhanced, the independent innovation ability and green safety level of phosphorus chemical industry will be steadily improved, the supply capacity of high-end phosphorus chemicals will be greatly improved, the regional complementary advantages and linkage development capabilities will be continuously enhanced, and the resilience and safety level of the industrial chain will be more stable. Among them, in terms of ecological cultivation, it is mentioned that about 3 first-class phosphorus chemical enterprises with industrial dominance and global competitiveness will be formed, and about 3 advanced manufacturing clusters with outstanding characteristics will be built.
Huajin's research report pointed out that the plan has made top-level planning and implementation measures for resource protection, product structure, regional and enterprise clusters, safe and green development of the phosphorus chemical industry, guiding the high-quality transformation and upgrading of the phosphorus chemical industry, promoting the improvement of industrial concentration and the coordinated development of industrial chain integration, which is conducive to high-quality enterprises to become bigger and stronger.