Rare! A-share "fertilizer" sector exploded, major bull stock 7 daily limits in 15 days

Why can Chitianhua, despite continuous losses, become a leading stock in the sector?

In the A-share market, the fertilizer sector, which has long been “unknown,” has surged!

Since March, the Tongdaxin “Fertilizer Concept” Index has risen up to 9.78% from its lows. Looking at the year-to-date, the “Fertilizer Concept” has gained as much as 25.33% from its lows.

Among them, Chitianhua (600227.SH) has become one of the sector leaders, with 7 limit-up days in the past 15 trading sessions.

The sudden surge in the fertilizer sector is driven by three reasons:

1. The overall strengthening of the chemical sector; 2. Concerns over a global fertilizer crisis triggered by the Middle East war; 3. The influence of (HALO) investment strategies.

The fertilizer sector is a branch of “large chemical industry,” which is part of the overall chemical sector strengthening.

Since the beginning of the year, the Tongdaxin chemical sector index has increased by a maximum of 19.77% from its lows.

From an industry fundamentals perspective, China’s chemical industry has experienced nearly four years of lows, and there are signs of recovery. Reasons include: “Anti-involution” efforts leading to the gradual clearing of excess capacity; foreign chemical industries shutting down capacity due to high energy costs; geopolitical conflicts in the Middle East causing crude oil fluctuations, as crude oil is a key upstream raw material for the chemical industry, raising expectations for chemical pricing.

As of March 16, 2026, China’s Chemical Product Price Index (CPPI) reached 5109 points, up 33.64% from 3823 points on November 5, 2025.

Fertilizer belongs to the chemical industry category, so a strong chemical sector naturally benefits the fertilizer sector.

The Middle East war is a short-term catalyst for fertilizer strength.

The situation in the Strait of Hormuz continues to escalate, with nearly one-third of urea and 44% of sulfur exports blocked, causing international fertilizer prices to rise over the past two weeks.

On February 28, the US and Israel launched military strikes against Iran. Iran’s Islamic Revolutionary Guard Corps immediately announced that it would ban any ships passing through the Strait of Hormuz.

On March 16, media reports indicated that no ships were navigating through the Strait of Hormuz on the 14th. This was the first such occurrence since the US and Israel launched military actions against Iran.

On the same day, Iran’s Foreign Minister Araghchi stated at a press conference in Tehran that Iran’s blockade of the Strait of Hormuz targets only “enemies,” specifically “those countries and their allies that unjustly attack our nation.”

Let’s also talk about (HALO) investment strategies.

“HALO” stands for “Heavy Assets, Low Obsolescence,” meaning “heavy assets with low淘汰率.” “HALO” is a recent global investment strategy gaining popularity.

The logic behind it is that A1 will disrupt many industries worldwide, so the market needs to rediscover some industries with heavy assets and difficult to replace.

The US stock “Energy Equipment and Services” sector has recently increased by 39.58% over three months, exemplifying the “HALO” logic.

In the A-share market, power-related sectors have been quite active recently. In fact, fertilizer is also a typical “HALO” asset. No matter how AI develops, people still need to eat, and growing food relies on fertilizer. Additionally, the fertilizer industry also features heavy assets.

Finally, let’s discuss the company Chitianhua.

Chitianhua’s business includes chemicals, medical services, and coal. Its chemical business mainly focuses on fertilizers. Its wholly owned subsidiary, Tongzi Chemical, is a large nitrogen fertilizer producer in Guizhou Province, mainly using coal as raw material, and is a large coal chemical enterprise. Its main products are urea, methanol, and compound fertilizers.

In recent years, the company’s performance has been under continuous pressure.

The company expects a net loss of 288 million to 380 million yuan in 2025.

Previously, in 2021, 2022, 2023, and 2024, it suffered losses for four consecutive years, with losses of 57 million, 371 million, 124 million, and 87 million yuan respectively.

Earlier, centralized procurement once impacted the company’s performance.

Chitianhua’s subsidiary, Shengjitang Pharmaceutical, was divested through asset swap transactions, and since December 2023, Shengjitang Pharmaceutical has no longer been included in the company’s consolidated financial statements.

The 2023 annual report shows that under the normalization of national centralized procurement, Shengjitang Pharmaceutical’s main products—metformin hydrochloride tablets, glimepiride tablets, gliclazide tablets, pioglitazone tablets, acarbose tablets, duloxetine hydrochloride tablets, nitrendipine sustained-release tablets, and tranexamic acid injections—have all been included in the national procurement catalog, but none have won bids.

In 2024 and 2025, the company’s losses are somewhat related to its hospitals.

2024 is the first full year of operation for the company’s hospitals; they are still in the startup phase. In 2025, the hospitals are in early development; although operating income increased by about 60% year-over-year, a large portion of revenue comes from medicines and consumables, which generate no profit.