\u3000\u3 China Vanke Co.Ltd(000002) 258 Lier Chemical Co.Ltd(002258) )
Core view
The company is the double leader of glufosinate and Chloropyridine herbicides Lier Chemical Co.Ltd(002258) is the largest R & D and production base of Chloropyridine herbicide series pesticide products in China and the largest manufacturer of glufosinate technical drug in China. At present, the company's pesticide technical products mainly include glufosinate, picrotoxin, chlorpyrimidine, and flumoxone. Among them, the production capacity of glufosinate technical is 15400 tons, accounting for 30% and 50% - 60% of the market in the world and China respectively, and the market share of BIC grassland medicine in China is about 60%, 50% - 60% of the technical drug of picrotoxin, 20% - 30% of the technical drug of flumoxone, and more than 90% of the technical drug of chlorpyrimidine. The company has a design capacity of 48600 tons / year of technical drugs (1200 tons / year under construction) and 43800 tons / year of preparations.
The performance has maintained stable growth, with high gross profit margin and small fluctuation. The company's operating revenue maintained a rapid growth rate, with an average compound annual growth rate of 19.80% in recent ten years. Among them, the ratio of the company's pesticide technical drugs to the operating revenue has been maintained at about 60% - 70%, and the revenue of the technical drugs sector accounted for 66.69% in 2021. In recent years, the company's main business has shifted from export to domestic sales, and China's revenue accounts for more than 50%. In addition, the gross profit margin of Lier Chemical Co.Ltd(002258) pesticide products is higher than that of most comparable listed companies in the same industry, with obvious competitive advantage in the industry, small fluctuation of gross profit margin and stable operation.
Glufosinate has a broad market prospect, and the company continues to focus on expanding the production capacity of glufosinate. In 2021, the global demand for glufosinate is about 45000 tons / year. In the long run, with the penetration of new generation transgenic, the prohibition and substitution of paraquat, the increase of compound preparations and the decline of glufosinate price, the demand for glufosinate will increase by no less than 45200 tons. According to the prediction of China research network, the global demand for glyphosate will reach 67600 tons in 2025. At present, the company's Mianyang base and guang'anlier have the production capacity of glufosinate of 8400 tons and 7000 tons / year respectively. In the future, the company will continue to increase the production capacity of glufosinate / PMG in the two bases.
Layout l-glufosinate and other fields to develop high-end products. The advantage of l-glufosinate is that the dosage is only 1 / 2 of that of traditional glufosinate, which is in line with the development direction of "green prevention and control, reduction and harm control" of pesticides in China, but the technical barrier is still high Lier Chemical Co.Ltd(002258) has mastered the key technology of large-scale synthesis of PMIDA, and successively announced that Mianyang headquarters will build 10000 tons and 30000 tons of PMIDA capacity in 2020, and guanganlier will also build 3000 tons / year PMIDA capacity (the project has been put into trial production at present).
Further consolidate the dominant position of the main business of chlorinated pyridines Lier Chemical Co.Ltd(002258) continue to reach strategic alliances with important customers through joint ventures, and continue to consolidate its market position in the old products of chlorinated pyridine.
Profit forecast and Valuation: we predict that the net profit attributable to the parent company in 202224 will be 1.216/14.15/1.695 billion yuan (+ 13.4% / + 16.4% / + 19.8%), and EPS will be 2.3/2.7/3.2 yuan respectively. Combining the absolute and relative valuation methods, we believe that the reasonable valuation range of the company's stock is between 34.63-42.15 yuan, with a premium of 23% - 50% relative to the current stock price. For the first time, give a "buy" rating.
Risk tips: the production capacity is less than expected, the demand is less than expected, and the cost of raw materials rises sharply.
