The high prosperity of the phosphorus chemical industry continues to spread; ST Sierte invests 866 million yuan to expand its fine phosphate project.

The project is located on the company's existing land, covering an area of approximately 52,495 square meters. The construction cycle is scheduled from January 2027 to October 2028, and the construction funds will be raised jointly through the company's own funds and external self-raised funds. The company stated that the core purpose of this investment is to extend the phosphorus chemical sector chain and increase the added value of fine phosphorus items. The commissioning of the project will not significantly boost the company's current operating performance in the short term.

This expansion aligns with the company's prolonged research strategy. Over the years, ST Sierte has persisted in a two-way extension layout: locking in phosphate rock resources upstream and developing high value-added fine phosphorus items downstream. Currently, the company has deployed multiple fertilizer production bases in Ningguo, Xuanzhou, and Bozhou, establishing a complete integrated sector chain covering pyrite-based acid production, phosphate compound fertilizer production, and terminal sales. In June of this year, the company also reached a strategic cooperation credit line of 4.5 billion yuan with the ICBC Guiyang Branch to provide financial support to the expansion of the entire phosphorus and fluorine chemical sector chain.

Business operations mixed: Revenue increased without profit development last year, with a significant profit recovery in the first quarter of 2026

Behind the massive expansion, ST Sierte is simultaneously facing the dual pressures of performance fluctuations and internal rectification.

In 2025, the company's annual revenue was 4.662 billion yuan, a slight year-on-year increase of 8.87%, however the profitability side weakened significantly: net attributable profit was 181 million yuan, a year-on-year decline of 39.92%; net profit after deducting non-recurring gains and losses was 173 million yuan, a year-on-year decrease of 37.65%, presenting a typical pattern of increased revenue without increased profit.

The company explained two core factors to the performance decline:

First, rising upstream raw material prices compressed the gross margin of the phosphate compound fertilizer business;

Second, the recoverable reserves of the core phosphate asset, Guizhou Luming Niniwan Phosphate Mine, have depleted, leading to a contraction in mining and sales scales, which dragged down the overall profitability level.

Entering 2026, the company's operational fundamentals have seen a significant recovery. First-quarter revenue was 1.373 billion yuan, a year-on-year increase of 27.04%; net attributable profit was 69.1153 million yuan, a surge of 81.14%; net operating cash flow was 331 million yuan, soaring by 91.42%, with profitability and collection capabilities improving simultaneously.

Full sector chain expansion collectively, phosphorus chemical companies accelerating binding to the new energy track

Currently, the prosperity of the phosphorus chemical sector continues to rise. Driven by demand from the new energy lithium battery sector, the sector has entered a capacity expansion cycle, and leading companies have all unveiled extensive investment plans.

· Yuntianhua's joint-stock subsidiary plans to invest 8.169 billion yuan to build a new ten-million-ton-level phosphate mining project to consolidate upstream resource supply capabilities;

· Xinyangfeng plans to invest 6.2 billion yuan to build an integrated base to phosphorus-based new energy and new materials in Hubei, simultaneously laying out traditional phosphate compound fertilizers and lithium iron phosphate, as well as high-end new materials to fine phosphates, widening development space on both fronts.

Analysis points out that the power battery sector chain is the core driving force to this round of rising prosperity in the phosphorus chemical sector. The continuous expansion of lithium iron phosphate capacity drives a steady increase in demand to upstream phosphate rock and refined phosphoric acid. Institutions estimate that in 2026, the total domestic output of lithium iron phosphate will see a year-on-year increase of 30%-50%, corresponding to an additional demand to phosphate rock of 5 to 8 million tons. The tight stability between sector supply and demand will be maintained to a long time.

sector research logic: Advantages of integrated resource companies highlighted, long prosperity cycle continues

sector insiders study that the continuous emit of lithium iron phosphate capacity will continue to support upstream phosphorus raw material demand, and the transformation logic of the phosphorus chemical sector is clear. companies with an integrated full-chain layout covering phosphate mining, beneficiation, and deep processing possess solid cost barriers and resource advantages.

The dual research model of traditional phosphate fertilizer business combined with new energy lithium battery materials will form an manufacturing resonance effect. companies with a complete sector chain and those that have deployed in fine phosphates and lithium iron phosphate tracks ahead of time are expected to continue to enjoy the prolonged prosperity dividends of the sector.