高盛推荐农业类股：Top pick still urea, potash improving; HLHS to C-Buy, QSLP to Buy
【出版时间及名称】：2009年11月19日
        【作者】：高盛
        【文件格式】：PDF
        【页数】：36
        【目录或简介】：Urea still the top pick, but potash fundamentals are improving
We are turning more positive on China’s fertilizer sector for the following
reasons: (1) laggard sector year-to-date: -14% relative underperformance ytd
(12-m: -17%). We expect strong volume recovery in mid-1Q2010 as spring
planting begins; (2) near-term supply tightness for urea and phosphates is
constructive for strong pricing and margin expansion as demand picks up; (3)
low expectations in the potash industry. If China settles its 2010 import
contract (our base case: US$330-US$350/ton FOB Baltic) before end-1Q2010,
we expect the establishment of a near-term price floor to catalyze a snap-back
in potash demand next spring; and (4) positive news flow on agriculture
stimulus expected to run up to the spring planting season in mid-1Q2010.
Key estimate and rating changes
Our estimate changes are largely driven by two key factors: (1) China fertilizer
price deck revision, and (2) factoring in an estimated 50% potential gas
price hike (+Rmb0.40/m3
) for gas-based urea producers in 1H2010E,
contributing to EPS cuts for CBC (-5%), YTH (-18%) and HBYH (-23%).  
We maintain our Buy rating on Hualu Hengsheng (HLHS) and add it to our
Conviction Buy List for its pure exposure to coal-based urea production (we
expect no negative impact from a potential gas price hike) and high sensitivity
to urea price volatility, which we believe could surprise on the upside in
1H2010. We also see least downside risks to our HLHS forecasts. We upgrade
Qinghai Salt Lake Potash (QSLP) to Buy from Neutral on market share gains
in 2010. We believe QSLP’s sales volumes to Sinofert, and consequently
earnings will surprise on the upside as Sinofert buys more from QSLP at a
lower price but comparable quality to imports. We downgrade Yuntianhua
(YTH) to Sell from Neutral on premium valuations (40X P/E vs. sector average
of 20X) after factoring in a 50% potential gas price hike. We maintain our Sell
rating on Sinofert on rich valuations, albeit an improving potash outlook. We
await China’s import potash price settlement, which is a swing factor for
Sinofert’s margins. Maintain Buy on Hubei Yihua (HBYH) for its large urea
and phosphate exposure and high sensitivity to urea price volatility, but prefer
HLHS for zero exposure to a potential gas price hike