Shandong Weifang Rainbow Chemical Co.Ltd(301035) (301035)
Continuously improve the global marketing network and promote the globalization of Chinese brands. Focusing on global crop protection, the company has the ability of technical drug synthesis and preparation processing of a variety of crop protection products. Its products cover five categories: herbicides, pesticides, fungicides, plant growth regulators and seed treatment agents. Its business covers more than 70 countries. It is committed to providing crop protection products and services to customers all over the world. It has built a platform covering the R & D of pesticide technical drugs and preparations Production and a complete business chain of brands, channels, sales and services facing the global market, and actively promote to realize "made in China all over the world to Chinese brand globalization". The company's export volume of crop protection products has been ranked first in China for many years. According to the list of top 20 global agrochemical enterprises in 2020 released by agropages, Shandong Weifang Rainbow Chemical Co.Ltd(301035) ranked 11th in the world in 2020. It has formed the second echelon of the international agrochemical industry together with Sumitomo chemical, Newham and other old multinational companies, It is also the only multinational crop protection company born in China.
The overseas independent registration mode creates a high barrier moat. The company's pesticide sales mainly adopts the combination of traditional export and overseas independent registration model. The overseas independent registration model has barriers such as large investment in registration certificate, long time of obtaining certificate and high technical requirements. By the end of 2020, the company had obtained 3082 pesticide registration certificates overseas. Under the independent registration mode, the bargaining power for downstream customers was enhanced, and the corresponding sales gross profit margin was also higher than that of the traditional pesticide export mode. In 2020, the gross profit margin of the company's overseas independent registration mode was 20.43%, 6.36 percentage points higher than that of the traditional mode. Benefiting from the company's mature independent registration system, the number of overseas independent registration certificates of the company increases steadily every year, and new registration and original registration products can contribute stable revenue to the company. In addition to continuing to strengthen its layout in Brazil and other South American countries, the company's registration business is gradually expanding to the EU region with higher barriers, which will also relay the South American market and is expected to become the main source of the company's performance growth in the future.
Accelerate the integrated layout of raised investment projects and strengthen the registration of overseas products. The company raised 1.34 billion yuan to invest in the fields of pesticide preparations, technical drugs, R & D and global product registration, including 68600 tons of pesticide preparations and 23500 tons of pesticide technical drugs. The company further strengthened the layout of the company's global pesticide preparation sales network, and the company's pesticide product line was richer, laying a solid foundation for future market expansion. The company expects that the raised investment project can realize an annual income of 3.79 billion yuan and an annual net profit of 370 million yuan.
Profit forecast and investment suggestions: relying on a large number of high barrier and differentiated overseas self registered products, under the efficient operation of the management team, the company has built a global marketing network characterized by "rapid market entry", which has pushed domestic brands to globalization. At the same time, the construction of raised investment projects has strengthened the integration advantage and further enhanced the industry competitiveness. We expect the company's revenue from 2021 to 2023 to be RMB 8.767/105.15/12.629 billion respectively; The net profit attributable to the parent company is RMB 622 / 782 / 1013 million respectively, and the corresponding PE valuation is 23.6 / 18.8 / 14.5 times respectively. It is covered for the first time and given a "buy" rating.
Risk tips: large fluctuation of raw material price, safety production risk, large fluctuation of exchange rate risk and policy risk of overseas pesticide importing countries.
