Anhui Huilong Agricultural Means Of Production .Co.Ltd(002556) (002556)
Analysis and judgment:
The demand for agricultural materials is improving, leading the whole industrial chain
The company specializes in the circulation business of agricultural materials, and its main business is the chain business of important agricultural materials such as various chemical fertilizers, pesticides and seeds. At present, the company has chemical fertilizer business in 17 provinces and regions in China, pesticide business in more than 10 provinces, exports in more than 60 countries and has a strong distribution network. In order to adapt to the development of modern agriculture, the company has changed from simply providing "products" to providing "products + services + Solutions" package technical service mode, so as to further amplify the advantages of the whole industrial chain of the company's industry and trade integration. The company has outstanding comprehensive service advantages. 1) in terms of products, the company has successively invested in the construction of five new fertilizer production and processing bases. At present, it has an independent brand compound fertilizer production capacity of 1.2 million tons, monoammonium phosphate production capacity of 200000 tons, and plans to increase the compound fertilizer production capacity of 500000 tons. It is expected to be officially put into operation in 2022. 2) In terms of service, the company's unique sales model of "distribution center + franchise store" enables the sales and service terminal network to meet the production and consumption needs of farmers in a short distance. 3) In terms of solutions, the company actively explores to create a closed-loop agricultural industrial chain service. Under the background of the recovery of the downstream planting industry chain, the company, as the leader of China's agricultural materials, is expected to fully benefit.
M & A of Haihua technology, multi products support performance growth and enter the fast lane
With the success of m-cresol anti-dumping litigation, the price of imported m-cresol rises sharply, the import volume continues to shrink, China's demand continues to be strong, supporting m-cresol prices to remain high, inter company cresol technology is mature, and the profit elasticity is worth looking forward to. In 2022, an additional 10000 tons of m-cresol will be put into operation in Haihua, mainly for supporting downstream menthol. Under the background of continuous rising labor costs, the proportion of synthetic menthol has been rising. It is estimated that the first quarter of 2022, when 3000 tons of menthol is put into operation, the company will become China's first fragrance and fragrance enterprise to complete the layout of the industrial chain of cresol thymol menthol, and further play the advantage of the production chain, and enhance its comprehensive competitiveness and profitability. The production of menthol is a milestone for Haihua, which will greatly increase the performance flexibility of the company.
Profit forecast and investment suggestions
The recovery of the planting industry chain will drive the company's agricultural materials business demand to improve, and the continuous production of m-cresol and menthol will gradually increase the company's profits. We maintain the expectation that the company's operating revenue will be 18.208/20.049 billion yuan and the net profit attributable to the parent company will be 500 / 705 million yuan respectively from 2021 to 2022, and increase the expectation that the company's operating revenue will be 24.47 billion yuan and the net profit attributable to the parent company will be 1.009 billion yuan in 2023. To sum up, we expect that from 2021 to 2023, the company's EPS will be RMB 0.52/0.74/1.06 respectively, and the closing price on December 30, 2021 will be RMB 11.70, corresponding to PE will be 22 / 15 / 11x respectively. Considering the strong certainty of the company's performance growth, we maintain the "buy" rating.
Risk statement
Risk of product price fluctuation, risk of foreign investment and risk of chemical demand falling short of expectations.
