磷酸岩项目延迟开工可能延长上行周期，上调云天化&信阳丰盈利预测

Chemicals Phosphate:Delayed phosphate rock project ramp-upsmayextendtheupcycle guaranteed sulphur supply and stable fertiliser margins Head,A-sharePetrochem&New MaterialsResearchHSBC Qianhai Securities Limitedyi.ru@hsbcqh.com.cn+862150662008 +Weexpectphosphaterockupcyclestolastlongeronsupplyconstraints not registered/qualified pursuant toFINRA regulations +Constructiveonphosphate;preferYuntianhua(Buy) Resilient 2Q26 results on stable input costs. Yuntianhua and Xinyangfeng (XYF)fertiliser sales, with both delivering YoY earmings growth and beating our 2Q expectations.In contrast, Chanhen, which has no fertiliser sales and therefore did not benefit fromearnings estimates forYuntianhua andXYF to reflect robust 2Q results, stable GPMsonlow-costsulphurand resilientfertiliserdemand;however,we cut Chanhen's2026-28e earnings by 14-16% to reflect delays in its new phosphate rock projects. Supplyconstraintstoprolongtherockcycle.Weexpectthesupplyof phosphaterock to remain constrained in 2026 amid increasingly stringent mine safety inspections,while rapid growth in lithium iron phosphate should increasingly offset the weakeroutput of phosphate fertilisers.We therefore expect phosphate rock fundamentals toremain tight. Over the longerterm, wehad been concerned that the newphosphaterock capacityexpected around2028 could weaken the supplyldemandbalance.However, continued delays in Chanhen's projects highlight the difficulties of domesticphosphaterock exploration and suggestnewcapacity ramp-ups maybe slower thanpreviously expected. We therefore expect an extended phosphate rock upcyclebeyond ourprevious expectations. Limited impactfromelevated sulphurprices.Thegovernment'sguaranteedsulphur supply programme should continue to support the profitabilityof phosphatechemicalproducers.During1H26,phosphatechemicalproducerswithfertilisercapacities benefited fromlow-cost sulphur, which helped alleviate raw material costpressure;Yuntianhua inparticularsawasequentialdecline insulphurprocurementcostsWe expect the programme to remain supportive in 2H26 amid unresolved US-Iranbased sulphuric acidfacilities should provide an additional source of cost savingsand further support industry margins. Constructive on phosphate; prefer Yuntianhua. Despite continued earnings growthin2Q26forthephosphatesector,concernsoverphosphaterock fundamentals andthesustainability of higher sulphur prices have weighed on share prices. However, weexpecttightphosphaterock supplyto support earnings andvaluations across thesector.Wefine-tuneourTPforYuntianhua(Buy)toRMB43.90(fromRMB43.10);itisour preferred namegiven the attractiverisk/reward.We cut Chanhen's TP toRMB38.90(from RMB49.00)after we cut its earnings estimates.However, Chanhen's dividendyield should provide downside support despite its delayed growth potential, and wemaintain our Buy rating. See key risks in the company section. HSBC13thAnnualChinaConference Shenzhen|1-2September2026 Find out more Disclosures & Disclaimer Issuer of report: HSBC Qianhai Securities Limited This report must be read with the disclosures and the analyst certifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Qianhai Securities at:https://www.research.hsbc.com Earnings revisions government's guaranteed sulphur supply policy significantly alleviated the rawmaterial costpressure, while improving profitability in yellow phosphate, and DcP further supported margins.As a result, the GPM expanded by 1.5ppt YoY, partially offsetting the decline in revenue, withgross profit down 5% YoY. Together with continued cost control, Yuntianhua delivered 3% YoYgrowth in 2Q net profit. policywillcontinuetosupportmargins in2H26,weraiseour2026netprofitestimateby7%bringing our forecast broadly in line with consensus. Chanhen's products are more market-oriented than those of peers with fertiliser businesses, as thecompany does not produce phosphate fertiliser. Higher product prices therefore drove 2Q revenuegrowth of 20% YoY. However, rising raw material sulphur costs weighed on profitability, with the GPMdeclining 1.7ppt YoY.2Q net profit increased 11% YoY, but came in slightly below our expectations. Following the company's announcement that the commissioning ofthe Laozhaizi phosphaterockproject has been delayedfrom 2028to2029,we expect the ramp-upof its phosphaterockproductiontobeslowerthanpreviouslyanticipated.Wethereforecutour2026,2027and2028netprofitestimatesby14%,16%and14%,respectively,reflectingthedelayedcontributionfromthe new phosphate rock capacity and the resulting postponement of earnings growth. support to its share price despite potential earnings revisions by consensus ahead Xinyangfeng's 2Q revenue grew 22% YoY, driven by higher sales of compound fertilisers.However, a sharp increase in sulphur costs weighed on profitability,with GPM declining 1pptNevertheless, gross profit increased 20% YoY, while net profit rose 6% YoY. Followingthe strong2Qperformance,we raise