Goldman Sachs expects that trade disruptions will positively impact the profitability of domestic fertilizer companies and continues to recommend buying YTH

Goldman Sachs published a research report assessing the potential profit impact on Chinese fertilizer and methionine companies from disruptions in trade through the Strait of Hormuz. The bank stated that the Middle East accounts for 15% to 20% of global urea production, 13% of phosphate production, and 20% to 35% of global urea and diammonium phosphate/monoammonium phosphate trade volume.

Scenario analysis shows that the situation will positively impact the earnings of the stocks covered by the bank, with a range of 1% to 11%, based on the assumption that global urea, diammonium phosphate/monoammonium phosphate, and methionine prices are 6% to 15% higher than the bank's 2026 expectations.

The bank believes that urea faces the greatest risk of supply disruption, followed by phosphate and methionine; it maintains a "Buy" rating on YTH (600096.SH), a "Neutral" rating on China Heartland (01866.HK), and a "Sell" rating on Andisu (600299.SH)