After clarifying the strategy of extending to the upstream of the industrial chain, Stanley (SZ002588), which is deeply involved in the field of compound fertilizer, will increase its weight in the field of new energy.
On the evening of June 29, Stanley announced that the company will use its holding subsidiary Songzi Stanley Yihua New Material Technology Co., Ltd. (hereinafter referred to as “Stanley Yihua”) as the main body of project implementation, and invest 4.47 billion yuan in Songzi City, Hubei Province. Construction of new energy material precursor iron phosphate and supporting projects.
Regarding the investment purpose, Stanley said that the project will deeply couple the new energy material industry with the phosphorus chemical industry, and produce ferric phosphate, the precursor of the cathode material for new energy batteries, through the preparation of purified phosphoric acid in the phosphorus chemical industry. , to promote the development of new energy materials business, fine phosphorus chemical industry and new fertilizer business with a circular economy development model, which can realize the strategic layout of the company’s phosphorus chemical industry chain.
In the compound fertilizer industry where Stanley is located, the price changes of compound fertilizers are highly correlated with the price changes of upstream NPK raw materials. More than 80% of the cost of compound fertilizer products is the cost of raw materials. The product pricing of compound fertilizer enterprises generally adopts a cost-plus method. Fluctuations in raw material prices will be transmitted to production costs, which in turn will affect the product price of compound fertilizers.
With the development of the compound fertilizer industry gradually entering a mature stage, Stanley has clarified the development strategy of extending to the upstream of the industry chain.
In the 2021 financial report, Stanley mentioned that the company will focus on extending the upstream phosphorus industry chain, enter the field of phosphorus chemical industry through mergers and acquisitions, joint venture cooperation and self-construction, establish a phosphorus chemical industry-phosphate fertilizer-compound fertilizer industry chain, and participate in a timely manner Ferric phosphate new energy field.
In this context, Stanley has also accelerated its layout in the field of new energy. In 2021, Stanley acquired a 51% stake in Chengde Lihe Fertilizer Co., Ltd. (hereinafter referred to as “Lihe Fertilizer”).
The main business of Lihe Fertilizer Industry is the production and sales of monoammonium phosphate. From the perspective of the industrial chain, the phosphate fertilizer industry in which the company operates is the upstream industry of the company. In 2021, due to the rise in the prices of upstream raw materials such as phosphate rock, sulfur, and synthetic ammonia, domestic phosphate fertilizer prices also rose sharply in the first half of the year, and gradually stabilized after the third quarter.
At the same time, the domestic export of phosphate fertilizer also maintained a relatively high growth this year. According to data released by the China National Chemical Industry Information Center, the export volume of monoammonium phosphate in China this year increased by 49.6% year-on-year, and the export volume of diammonium phosphate increased by 9.1% year-on-year. The phosphate fertilizer industry as a whole is in a boom cycle.
Stanley said that the acquisition of Lihe Fertilizer is the first step for the company to move up the industry chain. The “Daily Economic News” reporter noticed that after taking the first step, Stanley, who was born in agricultural stocks, is also actively promoting the layout of the phosphorus industry chain in the southern region.
In December 2021, Stanley Chemical Fertilizer Songzi Co., Ltd., a wholly-owned subsidiary of Stanley, and Hubei Yihua Songzi Fertilizer Industry Co., Ltd. jointly established Stanley Yihua, with the latter holding 35% of the shares.
In the 2021 financial report, Stanley mentioned that in the context of the “dual-carbon economy”, the development of energy-saving and new energy technologies has become the focus of the government. As a cathode material for new energy batteries, lithium iron phosphate has high safety and cost. The obvious advantages and other characteristics are widely favored by the market. In 2021, the domestic lithium iron phosphate market demand will show explosive growth. As the precursor of lithium iron phosphate cathode material, the demand for iron phosphate is also growing rapidly.
However, there are certain risks associated with this increase. Stanley mentioned in the announcement on June 29 that the benefits of the project are based on predictions made under normal market conditions. Under the influence of future uncertainties, there is a certain degree of uncertainty in whether the expected benefits can be achieved. There is a risk that the project benefits will not meet expectations.
In addition, regarding the progress and production expectations of the Stanley Yihua project, the “Daily Economic News” reporter repeatedly called the Stanley Securities Department on the morning of June 30, but the calls were not answered.
Judging from the performance of the secondary market, after disclosing the information on the new energy material precursor iron phosphate and supporting projects to be built, Stanley reached the daily limit on the morning of June 30, at 6.85 yuan, with a total market value of 7.9 billion yuan.