HK Stock Market Move | CHINA XLX FERT(01866) up over 7% again, up over 25% in the past six days. The new project launch will help reduce production costs.

CHINA XLX FERT(01866) has risen more than 7% again, with a cumulative increase of over 25% in the past six trading days. As of the time of writing, it has risen by 7.43% to HKD 9.4, with a turnover of HKD 1.08 billion. On the news front, the domestic urea market has shown a volatile upward trend recently. The ex-factory price of small granules in the mainstream regions in China has climbed to the range of 1580-1680 yuan/ton. Analysts predict that the domestic urea market will maintain a weak and volatile pattern in December, with limited downward potential due to cost and production reduction support, but insufficient upward momentum due to supply-demand contradictions. Guo Zheng International previously released a research report stating that the second phase of the Jiujiang base in Q3 of 25 successfully commenced operations, using more efficient, environmentally friendly, and energy-saving technology. With urea production at full capacity, overall production costs have decreased by 10%. By the end of 25, after the completion of the chemical new materials project in Xinxiang base, the urea production capacity will be further expanded, helping to effectively reduce urea production costs by about 12%. We believe that with the gradual release of low-cost production capacity, the profitability of the company will greatly improve.