Yangnong Chemical (600486): The performance growth is slightly lower than the market expectation. The water ring event prompted the demand for chrysantheme to maintain a high level of dicamba and promote recovery.
Investment Highlights: The company released its 2018 annual report: operating income in 201852.
9.1 billion (+ 19% YoY).
21%), net profit attributable to shareholders of listed companies8.
9.5 billion (+55 year-on-year.
73%), of which operating income was 9 in 18Q4.
4.6 billion (YoY-26.
28%), net profit attributable to shareholders of listed companies in the fourth quarter.
09 million yuan (YoY-34.
The performance was slightly lower than market expectations. The export of herbicides in the second half of the year decreased, and the sales of pyrethroids continued to grow.
The company’s herbicide product sales in 2018 were 51,588 tons (YoY + 6.
60%), average selling price 3.
920,000 yuan / ton (YoY-4.
30%). In the fourth quarter, affected by the trade war and dicamba drift, the export of dicamba Q4 was severely blocked. In the fourth quarter, the company’s herbicide sales were 8033 tons (YoY-37.
07%), average selling price 2.
54 million / ton (YoY-48.
24%), lower than market expectations; In 2018, the company’s main product, the pyrethroid boom, continued, with pesticide sales of 12,498 tons (+11 year-on-year).
24%), with an average sales price of 21.
200,000 yuan / ton (+24.
87%), the volume and price of the pesticide business went up. On a quarter-on-quarter basis, the average prices of the main products, kungfufen, bifenthrin, and cypermethrin in the fourth quarter were 37, 42, and 14 million / ton, respectively.15%, +5.
About 2%, 0%, as the company restructured to downstream customers to execute long-term orders, the price increase in the fourth quarter was completely reflected in the performance, and the growth of the pesticide sector Q4 exceeded expectations.
The production capacity of 1,000 tons of pyrazosin in the fungicide sector was gradually put into operation at the end of 18, and it is expected to start contributing in 19 years.
The company’s gross profit margin for sales in 2018 was 29.
64%, an increase of 2 per year.
21pct, the sales / management expenses (excluding R & D expenses) rate decreased by 0.
5pct, the increase in foreign exchange earnings caused the company’s financial expenses to fall more than in 20171.
At 33 ppm, the company’s net margin is finally increasing by 4 per year.
11 points to 17.
75%, with an expected average ROE growth of 5 over last year.
37pct reached 21.
08%, significantly improved profitability.
The Xiangshui incident is expected to tighten the supply of pyrethroids, and the wheatgrass market in the Americas will resume its growth. The 19Q1 performance is expected to exceed expectations.
On March 21, 2019, the impact scope of the safety accident in Rixiangshui Chemical Park gradually expanded. The northern Jiangsu Chemical Park stopped production and triggered safety inspections nationwide. The supply of pesticides and intermediates was tightened, and at the same time the second round of environmental protectionThe supervision and inspection started, and the pesticide price center will still maintain a high level in the future.At present, methyl tintinate, an important raw material for the upstream of pyrethroid, has started from 7 in early 2019.
5 million ton / ton rose to the current 11 million ton / ton. The downstream price of pyrethroid is expected to rise again. Yangnong has nearly 4,000 tons of acetic acid methyl ester production capacity. In addition to its own use, there are some external sales.The integration leader fully benefits the upward trend of the polyester industry chain, and the company’s long-term Q1 permethrin rose at a high price in early 19th, Q1 performance is expected to exceed expectations; dicamba is mainly sold to the American market, which is affected by various factors such as the trade war.The export of dicamba was less than expected in 18Q4, and the market is generally worried about downstream demand for dicamba. According to Monsanto’s forecast, the planting area of dicamba crops in the United States in 2019 can be increased to 60 million acres (5,000 acres in 2018). Therefore, Monsanto plans toField trials of dicamba-resistant soybeans will be carried out in Brazil in the 2020 planting season, and will be fully promoted in 2020 (the Brazilian soybean planting area was 89.65 million acres in 2018). It is expected that the market 深圳桑拿网 demand for dicamba in Monsanto South America will continue to expand, optimistic about the company’s 19Q3 dicamba exportsrestore.
The acquisition of Sinochem International’s agricultural chemical preparations, R & D focus, Youjia Phase III has steadily advanced, and Youjia Phase IV has continued to grow rapidly.
The company reached an agreement with Sinochem International to transfer the 100% equity of Sinochem Crops held by Sinochem International and the 100% equity of Agricultural Research Corporation in cash.
Sinochem crops have abundant downstream sales channels, combined with the company’s April 18 announcement3.
26 sample preparation projects to speed up the preparation of preparations. The acquisition is the basis for the company’s downstream preparations. The agricultural research company is an internally 武汉夜生活网 influential research and development platform. The domestic multi-pesticide variety production technology source company. The integration of agricultural research companies promotes Yangnong Chemical.Product research and development and business expansion inject development momentum and provide strong support for Yangnong’s existing research and development system.
The company is expected to broaden its sales channels through the acquisition of Sinochem crops, and the acquisition of agricultural research companies will gradually improve its research and development capabilities.
The company’s second-stage project of Youjia has been completed and put into operation. The third-stage project of Youjia is steadily advancing. The production capacity is expected to be put into operation at the end of 19th. At the end of 2018, the company announced the fourth-stage project of Youjia, including 3800 tons / year of bifenthrin and 1,000 tons.The annual investment of cyanamide, 120 tons / year of santhrin and 200 tons / year of hydroxyphenyl ester pesticides.
3 trillion, the project construction period is tentatively set to 2 years, after the project is completed and put into production, the estimated average annual operating income is 10.
2.3 billion, continuing the company’s high growth.
Investment suggestion: Maintain the “Buy” rating, maintain the company’s profit forecast for 2019-2020, increase the profit forecast for 2021, and expect the net profit to be returned to the parent in 2019-2021.
10,000 yuan, EPS 3.
84 yuan, the current market value corresponding to PE is 15X, 13X, 11X.
Risk reminders: 1) The progress of the new project is not up to expectations; 2) Environmental protection is relaxed, and product prices have fallen sharply.