So far this year, the fertilizer industry's share price underperformed the market by 11% (within 1 month down 8%; 3 months decreased by 15%; 12 months, down 17%). In our view, this resulted in lower market expectations for the selection of the potential integration of the fertilizer industry to provide a good opportunity.
(1) We expect 2010-2012 urea industry consolidation will accelerate, which is subject to the industry rate of return below the historical trend level (because of global oversupply of urea led to continued weakness in the price, and we expect to add low-cost production capacity urea caused a permanent change in the industry cost curve) driven.Based on our analysis, Hubei Yihua, Sinochem Fertilizer and chemicals will benefit from the sea, and the urea market share of these enterprises will be expanded.
(2) natural gas price increases in 2010 is expected to increase less than expected. Our current natural gas prices in 2010 could increase about 25% (previously forecast 50% increase), so we raised the gas urea corporate earnings forecasts.
(3) of the potash industry point of view is not so optimistic, because the price elasticity of demand for potash than the positive effects of the impact of inventory data.
Specific to the investment, it is recommended to buy Hubei Yihua (strong buy) and Sinochem Fertilizer (H shares).For the former, in our opinion, improve the predictability of its earnings as well as the integration of a defensive structure to a large extent benefit from industry consolidation.For the latter, because we think the stock is oversold. In our view, the fertilizer to the greatest degree of benefit from the lack of chemical fertilizer potential demand has picked up.
According to ancient Greek legend, animal manure as fertilizer is strongly Shihelake Ross first discovered. the river washed away with the cow dung, deposited in the vicinity of the land, harvest the crops obtained. Of course, this is a myth, but also indicating that people have realized the role of manure on crop yield. The ancient Greeks also found that the crops grown on the old battlefield, particularly lush, thus recognizing the body of humans and animals is a very effective fertilizer. In the "Bible" also referred to the animal blood poured on the ground application methods.
This article reprintted from guidechem.com. So if you want to know more information about it, please go to guidechem.com which contains much valuable information.At guidechem , you can get some information that you need . Thanks to come here, everyday will update new atricle.Written by xiaoya(yaoxya).
No comments:
Post a Comment