\u3000\u3 China Vanke Co.Ltd(000002) 258 Lier Chemical Co.Ltd(002258) )
The company is optimistic about the continuous optimization of the production process of glufosinate and the continuous improvement of the competitive advantage of glufosinate, so as to maintain the buy rating.
Key points supporting rating
Affected by the resumption of production in Mianyang base and the simultaneous rise in the volume and price of glufosinate and other products, the company's performance in 2021 slightly exceeded expectations. In 2021, the company achieved an operating revenue of 6.494 billion yuan, a year-on-year increase of 30.70%, and the net profit attributable to the parent company was 1.072 billion yuan, a year-on-year increase of 75.17%; In the fourth quarter, the net profit attributable to the parent company is expected to be 461 million yuan in a single quarter, with a significant year-on-year increase of 135.71%.
The price of glufosinate rose sharply, and the technical drug of refined glufosinate was successfully registered. With the continuous promotion of glufosinate resistant transgenic crops in recent years, according to zhongnongheng, the global glufosinate market sales will be US $1.05 billion in 2020. According to the data of Baichuan Yingfu, the average price of glyphosate in 2020 was 138400 yuan / ton, a year-on-year increase of 12.26%. In 2021, the average price of glufosinate was 244000 yuan / ton, an increase of 76.24% year-on-year; Among them, the average price in the fourth quarter was 354900 yuan / ton, up 118.72% year-on-year and 39.33% month on month in the fourth quarter. In 2022, the product price has dropped. As of March 4, glyphosate in East China reported 250000 yuan / ton, down 21.88% from 320000 yuan / ton at the beginning of the year, and up 38.89% year-on-year. At present, the company is the largest and lowest cost manufacturer of glufosinate technical drugs and intermediates in China, which has benefited the most from this round of high prices. From the perspective of competitive strength, in 2020, the company obtained the production license of refined glyphosate, conducted trial production, achieved success, and achieved mass production. L-glufosinate is an effective body that can really exert herbicidal activity and is the development direction of glufosinate industry in the future. According to the previous EIA announcement, the company plans to build the "42000 ton / year new pesticide production plant and supporting facilities construction project" including 30000 tons of l-glufosinate and the "92000 ton / year pesticide technical drug production project" including 20000 tons of glufosinate and 30000 tons of l-glufosinate in Mianyang and Guang'an bases respectively. With the gradual advancement of MDP and PMG projects, the company's voice in PMG industry will be further enhanced.
Reserve several potential varieties, resume production in Mianyang base, and look forward to long-term growth. In 2020, the company carried out the technical transformation of propargyl fluoxamine, and the product quality and production capacity were improved after the technical transformation. In addition, according to the EIA information, in addition to fluconazole, the company also reserves a number of potential varieties such as chlorfenoxamide, which will gradually open up long-term growth space in the future. In addition, with the gradual expansion of MDP, glufosinate and l-glufosinate, the company will benefit from the increase of production capacity and the large volume of l-glufosinate for a long time, and the profit level will remain high.
Valuation
Based on the continued boom of glufosinate market, the company's production capacity is improved and the profit forecast is raised. It is estimated that the earnings per share in 20222024 will be 2.76 yuan, 3.28 yuan and 4.32 yuan respectively, corresponding to 12.9 times, 10.8 times and 8.2 times of the current PE respectively. In the future, the cost of glyphosate will decrease and the profit will increase, so as to maintain the company's buy rating.
Main risks of rating
The project is not put into operation as expected; Risk of sharp fluctuations in product prices.
