\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
The performance reached a new high in 2021 and continued to maintain a steady, sustained and healthy development momentum. The company released the annual report of 2021: in 2021, under the adverse conditions of rising raw material costs and falling prices of some raw drugs, the company still ensured the stable growth of performance against the trend by closely connecting production and marketing, deeply tapping the potential of the device and implementing the incentive of increasing production and reducing consumption in bottleneck processes: the company achieved a total operating revenue of 11.84 billion (crossing the 10 billion mark for the first time), an increase of 20.5% year-on-year; The net profit attributable to the parent company was 1.22 billion, a year-on-year increase of 1%. Among them, the company achieved an increase of 13.2% in the sales of technical drugs; Overseas trade business increased by 93.4%. In addition, according to the company’s announcement: from January to February 2022, the company expects to realize a net profit attributable to the parent company of about 560 million yuan, a year-on-year increase of 100%, and the performance is bright, exceeding our expectations.
Adhere to the business policy of “producing more and selling faster, and compensating the price by quantity”. In 2021, the prices of raw materials generally rose, and the operating costs of agrochemical enterprises were under pressure. In this context, the company continues to deepen the strategic cooperation with peer enterprises, leading preparation enterprises and multinational giants of agrochemical industry, and expand the sales of core varieties; And adjust the product sales model according to market changes, accurately implement the price adjustment strategy, and improve the profitability of products. On the whole, the company continues to adhere to the business policy of “increasing production and fast sales, and compensating price by quantity”: (1) price: in 2021, the selling prices of pesticides and herbicides were 184000 yuan and 48500 yuan / ton respectively, with a year-on-year increase of – 3.41% and + 4.79% respectively; (2) Volume: benefiting from the phase III project of Youjia company and the release of new production capacity of Shenyang Kechuang fluconazole, the company achieved the output of pesticides and herbicides of 1814382 tons and 5166871 tons respectively, with a year-on-year increase of 16.2% and 0.0% respectively; The overall sales volume of the company was + 1623.8 tons and + 868.8 tons respectively, showing a year-on-year increase of + 86.8% and + 34.8% respectively.
Focus on promoting the construction of Youjia phase IV Project and deepen cooperation with Syngenta. The company has efficiently completed the construction of phase I project of Youjia phase IV (the products involve Difenoconazole, nitrosulfuron, bifenthrin and haloperidol). We expect that the volume of phase IV Project will make a positive contribution to the company’s performance in 2022; Shenyang Kechuang has implemented a number of engineering and technological transformation throughout the year, and the production capacity of Youke plant protection preparations continues to increase. In addition, Syngenta has become the controlling shareholder of the company in 2021. We are optimistic that Syngenta’s integration will accelerate Jiangsu Yangnong Chemical Co.Ltd(600486) undertaking its order transfer in the future, which will be conducive to the economy, stability and security of Syngenta’s raw material supply chain; With the help of Syngenta brand and sales channels, Jiangsu Yangnong Chemical Co.Ltd(600486) global market share is expected to increase.
Risk warning: price fluctuation of raw materials; Downstream demand is lower than expected; The progress of projects under construction is less than expected.
Investment suggestion: in the future, the company will continue to layout new projects, deepen the integration of research, production and marketing, operate efficiently, and promote the sustainable and high-quality development of the enterprise in an all-round way. We are optimistic that the company will become an international comprehensive agrochemical giant. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 1.627/2.100/2.425 billion respectively, with a year-on-year growth rate of 33.2% / 29.0% / 15.5%; Diluted EPS = 5.25/6.78/7.83 yuan, corresponding PE = 22.3/17.3/15.0x under the current share price. Maintain the “buy” rating.
