1.        We will comment the cancellation of chemical export tariff once relevant detailed measures are published.
 
2.        As for fertilizer export tariff changes, I was told that the base export price is Rmb2,050/t for urea (slack season is in October~November), Rmb2,600/t for MAP, Rmb3,200/t for DAP (slack season is in June, July and November). The export tariff would be levied at 10% for below-base price exports, and at 110% in busy season. We believe impacts of this news over nitrogenous fertilizer players should be insignificant as the international/domestic nitrogenous fertilizer price difference has narrowed down. The news is clearly positive to phosphate fertilizer players, due to big price differences at home and abroad. International phosphate fertilizer players are supported by their phosphorites while domestic players enjoy cost advantages. Listed phosphate fertilizer producers mainly include YTH International (to be injected in the listco), Hubei Yihua and Anhui Liuguo. We expect that Anhui Liuguo could benefit more from the news as it has no high-priced sulfur inventory.
 
3.        Effective January 1, 2009, China will exercise export quota license management over the export of phosphate ore (customs tariff numbers: 25101010, 25101090, 25102010 and 25102090). The total phosphate ore quota is 1.5mt for 2009, positive to YTH Group (due to easy export) and the domestic phosphate ore prices. Hubei Xingfa may also be a beneficiary thereof.
 
 （1）对于部分化工品出口关税取消，因为具体产品细则没有出台，我们将在细则出台后点评。
（2）对于化肥出口关税征税方式调整，我们听到的消息是：尿素出口基价2050元，淡季为10～11月，MAP（磷酸一铵）基价2600元，DAP（磷酸二铵）基价3200元，淡季为6，7和11月份，低于基价，出口征税10％，高于基价另行征税，旺季征110％关税。我们认为氮肥国际国内差价已经缩小，影响不明显，磷肥国际国内差价较大，国际磷肥受到磷矿支撑，国内成本有一定优势，征税方式调整对企业明显利好。国家超过基价出口相对具有弹性。上市公司中生产磷肥的主要有云天化国际（本次注入上市公司）、湖北宜化和六国化工，六国化工因为没有高价硫磺库存影响，相对利好更明显。
（3）另外，自2009年1月1日起，对磷矿石（海关税则号25101010，25101090，25102010，25102090）出口实行出口配额许可证管理，2009年磷矿石出口配额总量为150万吨。对云天化集团利好（出口比较方便），对国内整体磷矿石价格偏于正面，兴发集团也将有所受益。