HK Stock Market Move | CHINA XLX FERT(01866) rose over 6% in early trading. It is expected that urea exports will be relaxed after the end of spring sowing. The chemical industry sector is also expected to see a simultaneous increase in both volume and price.

China XLX FERT (01866) rose more than 6% in the morning session, up 2.61% as of the time of writing, at HK$12.21, with a turnover of HK$63.2949 million. The tension in the Middle East is impacting the urea market. In the article "How will the fertilizer industry play out under the 'US-Iran' conflict: How will the leading fertilizer company China XLX FERT (01866) benefit?" it is pointed out that Iran's urea is mainly sold to agricultural powerhouses such as Brazil, Turkey, and India. If the supply of Iran's urea is interrupted, this demand gap may seek new import sources. China is also a major country in fertilizer production, but domestic export quotas are strictly controlled. The peak season of spring planting emphasizes supply stability and price stability, prioritizing domestic supply. The price fluctuations during the spring planting cycle are expected to be minimal. However, with the soaring international prices and resonating demand, deregulation of export policies and guiding prices are expected after the end of spring planting, bringing expectations of a simultaneous increase in volume and price for domestic urea manufacturers overseas. It is worth noting that China XLX FERT has diversified its business in recent years, with the chemical sector's revenue share continuously increasing. The company's fertilizer sector mainly includes products such as methanol, dimethyl ether, melamine, and liquid ammonia, with methanol being the core product. Iran is one of the world's core methanol exporting countries, and about 60% of China's methanol imports come from Iran. The expectation of a supply interruption may trigger a rush to purchase. China XLX FERT has core customers such as PetroChina and Sinopec for long-term cooperation. Methanol sales are expected to maintain high growth by 2025, and with the substantial price increase, it is expected that the first quarter of 2026 will see a substantial increase in product revenue and profit.