磷酸：乘储能市场之风

EquitiesChemicals Phosphate:Riding on energy storagemarket China ◆3Q25 beat on exportarbitrage; 4Qlikely dragged by sulfur costs◆2026 phosphate chainsupply/demand totighten on boomingenergy storage; cost inflation couldboostfertiliserexports◆We favourChanhen(over XYF and Yuntianhua); itsdividendyieldoffersvaluationprotectiondespitetherecentrally Yi Ru* (Reg. No. S1700520120001)Head, A-share Petrochem & New Materials ResearchHSBC Qianhai Securities Limitedyi.ru@hsbcqh.com.cn+86 21 5066 2008 Jill Huang* (Reg. No. S1700524120002)Analyst, A-share Petrochemical and New MaterialsHSBC Qianhai Securities Limitedjill.q.huang@hsbcqh.com.cn+86 21 5066 2024 Chanhen shows sustained positive momentum.Theshares of phosphate chemicalcompanies have rallied over the past month, driven by a broad earnings beat in 3Q25,thanks to export arbitrage in phosphate fertilisers and positive market sentiment on ironphosphate demand. We fine-tune 2025-27eearningsand TPsfor the three companieswe coverto reflect 3Q25 results. We believe the momentum ofChanhen’s(Buy)shareprice will continue, driven by: (1) its superior ability to pass through rising sulfur costs;(2) its expansion across rock and phosphate chemicals, offering clear growth visibilityinto 2026; and (3) a dividend yield of5% despite shares gaining 65%YTD(vs CSI300+19%).Chanhenis our preferred pick, given its high dividend yield and likely moreresilient4Q results supported by better product mix.WelikeXinyangfeng (XYF, Buy)forits defensive valuation amid steady earnings growth. ForYuntianhua(Buy),afterthe recent sharepricerally driven by the improved sentiment on iron phosphate, weexpect thesharesto consolidatebeforethe nextexport season in 2Q26. Weexpecthigher export volumes in 2026,which couldprovide earnings upside (investment thesisand valuation & risksonpages4and2). * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations Elevated sulfur pricesmayboostfertiliserexport2026.Theelevated sulfur costshave led tolowerrun rateof Chinesemonoammonium phosphate (MAP) anddiammonium phosphate (DAP)producers asgovernment’sprice caps prevent themfrom fully passing the increased costs on to consumers.Ifsulfurpricesstayhigh,theexport controls forMAP/DAPmay be easedin 2026which may helpdomesticplayers’profitability.Thismight besimilar to theurea exporteasein 2025,whendomestic players suffered fromsustainedmarginpressure(Exhibits3,6&9). Iron phosphate margins set to marginally improvein 2026.The booming energystorage market has been driving robust iron phosphate demand which we estimatecouldrise by 1.7mt in 2025 and another 1.2mt in2026(Ex20). We expect the additionaldemand could be fulfilled by increased output, although producershadcurtailed run rateamid severe oversupply. With supply surplus likely to sustain, we believe the recovery ofiron phosphate prices may be limited. Nonetheless, we expect producers to increase runrate and output, which should help improve their margins, and the tight supply-demandof phosphate rock is likely to extend into 2026(Ex19), in our view. Cost pass-throughfor non-fertiliser phosphate products.The elevated sulfur priceshas beenpassed through to thephosphate chain. Since late Oct,we see price increasesacross variousproducts.With strong domestic demand, weexpectfurtherprice hikesforfeed additives, industrial MAP and phosphate acid(raw materials of iron phosphate),although the phosphate fertiliser price may be capped by governmentcontrols.Industrykey downside risks: Phosphate rock prices decline; Tightened fertiliser export policiesresults in excess domestic supply;A decline in fertiliser demand if grain prices fall; Rawmaterial price continues to rise that leads to GPM declines; and energy storage demandgrowth is lower than expected. Changesin target prices Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in theDisclosure appendix, and with the Disclaimer, which forms part of it. Valuation and risks Investment thesis Chanhen–strongsharepricemomentumlikely to sustain, in our view,as supported bythree drivers: (1)Its superior position to pass throughsulfur cost.Itscore products(MCPandindustrial MAP) are not subject to government price controls.Additionally, its phosphate acidexports are not constrained by quotas, supporting earningsresilience in 4Q25eamid risingsulfur prices; (2) Chanhen’s expansion in petrochemicalsand upstream rockison track,providing continued growth visibility into 2026;and (3)Despitethesharepricegainof65% YTD(vs CSI300up 19%), its 2026edividend yield of c5% offersvaluation support. Therefore, wereiterate Chanhen as ourpreferredpick among China petrochemicalnames. Xinyangfeng (XYF)–defensive valuation with stable growth.We expect 4Q25 earnings toimprove YoY supported by a delayedautumnplanting season to Oct due to unfavourable weatherconditionsthis year. We trimour2025-27eearningsforecasts to reflecttheongo