HK Stock Market Move | CHINA XLX FERT(01866) rose by more than 5%, the sudden change in the Iran situation may push up international urea prices.

CHINA XLX FERT (01866) rose more than 5%, up 5.44% as of press time, at HK$11.63, with a turnover of HK$27.456 million. In terms of news, the recent escalation of the Middle East conflict has intensified market concerns about a shortage of fertilizer supply. It is reported that the Middle East is a core region for global fertilizer supply, including nitrogen, potassium, and phosphate fertilizers. Iran is the second largest exporter of urea, with an annual export of about 9 million tons. Galaxy Securities previously pointed out that a sudden change in the situation in Iran may lead to increased uncertainty in the restart of Iran's urea facilities and exports, causing a temporary urea supply gap in the international market, thereby pushing up international urea prices. China's urea production capacity is sufficient, and exports are subject to quota control. If the trend of increasing export quotas continues until 2025, the increase in quantity and price may improve the profitability of urea production enterprises. Public information shows that Xinlianxin Fertilizer is a leading urea enterprise in China, with top-notch scale and unit product profitability in the nitrogen fertilizer industry. It is the largest urea producer in the country, and its compound fertilizer production and sales volume also ranks first in the industry. In 2024, the company's urea production capacity is 3.9 million tons, with a compound fertilizer sales volume of about 2.3 million tons. In the first three quarters of 2025, the revenue contribution from these two major products accounted for 25.3% and 58% respectively, totaling more than 50%.