\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Event: on March 29, the company released its annual report for 2021. In 2021, the company achieved revenue of RMB 11.841 billion, a year-on-year increase of + 20.45%; The net profit attributable to the parent company was 1.222 billion yuan, a year-on-year increase of + 1.02%. Among them, 2021q4 company achieved an operating revenue of 2.6 billion yuan, a month on month increase of + 1.59% and a year-on-year increase of + 38.67%; The net profit attributable to the parent company was 207 million yuan, a month on month increase of – 7.83% and a year-on-year increase of + 10.71%.
Comments:
The release of production capacity superimposed the prosperity of the industry, and the company’s performance increased significantly. Benefiting from the capacity release of Youjia phase III, the company’s performance improved significantly in 2021. In terms of business types, the average selling price of pesticide technical drugs of the company decreased by 3.41% in 2021, and the operating revenue increased by 1.69% year-on-year; The average selling price of herbicide technical drugs increased by 4.79%, and the operating revenue increased by 13.99% year-on-year; The operating income of other technical drugs increased by 47.30% year-on-year, with the fastest growth rate. In 2021, the company produced 18100 tons of pesticide technical drugs and 51700 tons of herbicide technical drugs, with a year-on-year increase of 16.16% and 0.04% respectively. In addition, due to the dual control of energy consumption, the average price of glyphosate, one of the company’s core products, increased significantly in the second half of 2021. According to the data of Baichuan Yingfu, the average price of glyphosate in 2021h2 increased by 87.6% month on month. In addition, the company has made steady progress in China’s plant protection market and deepened strategic cooperation with major suppliers. In the second half of 2021, the controlling shareholder of the company was officially changed to Syngenta group, holding 36.17%. Thanks to the positive impact of Syngenta’s plant protection business in many countries and overlapping with the company’s business, the company’s overseas trade business increased by 93.4% year-on-year in 2021, providing a certain increment for the company’s annual operating performance. In 2019, the company acquired 100% equity of Sinochem crops and 100% equity of agricultural research company. The two subsidiaries exceeded the promised net profit in 20192021, and achieved a total net profit of 733 million yuan in 20192021, 147% higher than the original performance commitment target.
Youjia phase IV is gradually put into operation and continues to expand the profit space: the company’s Youjia phase IV project has been completed in December 2021 and started commissioning and production at the beginning of 2022. Thanks to the commissioning of the company’s Youjia phase IV Project and the high prosperity of the pesticide industry, the company achieved a revenue of about 3.5 billion yuan from January to February 2022, with a year-on-year increase of about 50%; The net profit attributable to the parent company was about 560 million yuan, with a year-on-year increase of about 100%, and the performance significantly exceeded expectations. After the completion of Youjia phase IV project, the company will add 8510 tons / year of pesticides, 6000 tons / year of herbicides, 6000 tons / year of fungicides, 500 tons / year of synergists and 4500 tons / year of internal supporting intermediates and by-products. After the production capacity of Youjia phase IV project is fully released, the profit space of the company will be further expanded.
Profit forecast, valuation and rating: the company’s performance from January to February 2022 exceeded expectations. We believe that the follow-up agrochemical industry will continue to maintain a high boom. We raised the company’s profit forecast for 20222023 and added the profit forecast for 2024. It is estimated that the net profit attributable to the parent company in 20222024 will be 19.72 (up 8.00%) / 22.22 (up 5.26%) / 2.356 billion yuan respectively, and the corresponding EPS will be 6.36/7.17/7.60 yuan / share respectively. The current stock price is only about 18 times that of PE in 2022. We maintain the company’s “buy” rating.
Risk tip: price fluctuation of pesticides and raw materials, environmental protection and safety production risks, and production capacity release is less than expected.
