\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Jiangsu Yangnong Chemical Co.Ltd(600486) released the annual report of 2021: the annual operating revenue was 11.841 billion yuan, yoy + 20.45%, and the net profit attributable to the parent company was 1.222 billion yuan, yoy + 1.02%, which was in line with the expectation.
The company’s revenue has achieved steady growth, and the revenue scale has exceeded the 10 billion mark for the first time. Among them, the sales of the original medicine business with the largest proportion of revenue increased significantly. In 2021, under the adverse situation of the decline of the price of the original medicine, the company achieved a year-on-year increase of 13.2% to 7.023 billion yuan by increasing production and fast sales and supplementing the price with quantity; The plant protection business made steady progress, strengthened the promotion of new brands, continued to optimize product formulas, and increased Wuxi Online Offline Communication Information Technology Co.Ltd(300959) linkage marketing. The sales of China’s plant protection market increased by 7% year-on-year. The company’s gross profit margin fell 3.11 percentage points to 23.43%, resulting in a low growth rate of net profit. As the prices of basic raw materials generally rose sharply, the average price of superimposed pesticide products fell by 3.41% year-on-year in 2021, the gross profit margin of the company’s pesticide business decreased by 4.66 percentage points to 26.79%, and the gross profit margin of the overall technical drug business decreased by 1.20 percentage points to 26.18%..
New projects are put into operation in an orderly manner and are expected to contribute to performance increment. The company’s Youjia phase III project has gradually reached production capacity in early 2021, and the production capacity of pyrethrin has been gradually released; Youjia phase IV project is expected to be put into operation gradually in 2022. The first phase of the project has been completed and commissioned and produced in early 2022. The products in the first phase involve four varieties of Difenoconazole, nitrosulfuron, bifenthrin and haloperidol. Thanks to the full production of Youjia phase III project and the completion and operation of the first phase of phase IV project, the company has achieved a revenue of 3.5 billion yuan from January to February 2022, with a year-on-year increase of about 50%, and a net profit attributable to the parent company of about 560 million yuan, with a year-on-year increase of about 100%. We believe that the subsequent launch of capacity under construction is expected to continue to contribute to the performance increment of the company.
Benefit from synergy within Syngenta group. In 2021, Syngenta group completed the transfer procedures of the transferred shares of the company and became the controlling shareholder of the company, which helped the company better obtain the order resources within the group. We believe that the internal synergy between the company and Syngenta group is increasing. In 2022, the company expects to provide Syngenta a G. Andorra sold products of 4.5 billion yuan and 720 million yuan respectively, a significant increase of 1.69 billion yuan and 190 million yuan respectively compared with 2021. In addition to the production of technical drugs, we believe that in the future, the company is expected to benefit from the development dividends brought by the agrochemical industry synergy within Syngenta group.
Profit forecast and investment rating of the company: as the leader of pesticide in China, the company’s projects under construction are promoted in an orderly manner. At the same time, benefiting from the coordination of resources within Syngenta group, we expect the company to continue to grow steadily. Based on the company’s 2021 annual report, we adjusted the company’s profit forecast from 2022 to 2024 accordingly. We predict that the net profit of the company from 2022 to 2024 will be 1.854 billion yuan, 2.114 billion yuan and 2.426 billion yuan respectively, and the corresponding EPS will be 5.98, 6.82 and 7.83 yuan respectively. The corresponding P / E value of the current stock price will be 20, 17 and 15 times respectively. Maintain a “strongly recommended” rating.
Risk tip: the product price has fallen sharply; The launch of new production capacity is less than expected; The internal integration of Syngenta group’s assets is less than expected; Market competition intensifies.
