The fundamentals of China BlueChem (3983.HK) looks promising with Crop price at 7-year high, driving fertilizer demand and global tight supply of urea. Domestic urea price rose Renminbi 200/ton MoM to Renminbi 2,100/ton in early-Feb, due to spike in global pricing (up more than 30% since end of 2020).
The stock is poised to benefit from the year on year jump in urea given its relatively stable natural gas cost under long-term contracts.
Looking at the technicals, the stock has broken out from its long-term downtrend, trading at a day-high of 2.12 (at the point of this write up) today and its bullish chart pattern showing further potential upside.
First Target – 2.30
Second Target – 2.48
Third Target – 2.95
Stop Loss – 1.75