\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Event description
The company released its 2021 annual report on March 29, 2022. The company achieved an operating revenue of RMB 11.841 billion, a year-on-year increase of 20.45%; The net profit attributable to the shareholders of the parent company was 1.222 billion yuan, a year-on-year increase of 1.02%; The net profit attributable to the shareholders of the parent company after deducting non profits was 1.137 billion yuan, a year-on-year increase of 4.32%; The net operating cash flow was 1.454 billion yuan, a year-on-year increase of 5.52%. Among them, 2021q4 achieved an operating revenue of 2.6 billion, a month on month increase of 1.6% and a year-on-year increase of 38.67%; The net profit attributable to the parent company was 207 million, a month on month decrease of 7.59% and a year-on-year increase of 10.71%.
Event comments
The price of technical drugs was supplemented by quantity, and the performance growth was in line with expectations. In 2021, under the unfavorable situation of the decline in the price of technical drugs, the company achieved an increase of 13.2% in the sales of technical drugs by increasing production and fast sales and supplementing the price with quantity. The revenue of pesticide products reached 2.985 billion, a year-on-year increase of + 1.7%; The average selling price was 183900 yuan / ton, a year-on-year increase of – 3.46%; The sales volume was 1622634 tons, a year-on-year increase of + 5.28%; The gross profit margin was 26.79%, a decrease of 14.82pct compared with the same period last year. Herbicide products achieved an operating revenue of 2.659 billion, a year-on-year increase of + 13.97%; The average selling price was 48500 yuan / ton, a year-on-year increase of + 4.75%; The sales volume was 5486198 tons, a year-on-year increase of + 8.78%; The gross profit margin was 26.95%, an increase of 10.22pct over the same period last year. The annual gross profit margin of the company was 23.06%, a decrease of 12.35pct compared with the same period last year. The expense rate during the period was 11.21%, a decrease of 10.75 PCT compared with the same period last year; The credit impairment loss was – 35 million, a year-on-year increase of + 197095%, which was due to the increase of accounts receivable and the corresponding increase of bad debt reserves.
Overseas business has made steady progress, and Syngenta group is the controlling shareholder of the company. In 2021, the company’s overseas revenue was 6.9 billion yuan, with a year-on-year increase of 15.19%. In the complex environment of epidemic spread, blocked shipping, rising costs and fluctuating prices, the company deepened cooperation and coordination with multinational companies, strengthened market sales and customer development, and achieved strong growth in the Americas, Eastern Europe, Middle East Africa and Asia Pacific markets. In 2021, the overseas trade business increased by 93.4% year-on-year. In 2021, Syngenta group completed the transfer of 36.17% of the company’s shares and became the controlling shareholder of the company. The company authorized Syngenta Asia Pacific and its subsidiaries to represent the sales business of India, the Philippines and Thailand. Syngenta Asia Pacific and its subsidiaries will purchase pesticide products from overseas crops and SINOCHEM agrochemical, and pay license fees and service fees to overseas crops and its subsidiaries. The first phase of cooperation is five years.
The commissioning of the first phase of Youjia phase IV was completed, and the company’s industry influence was further improved. In 2021, Jiangsu Youjia achieved an operating revenue of 4.1 billion yuan and a net profit of 648 million yuan. The company opened up the market of Youjia phase III and Baoye products and created new growth points. The first phase of Youjia phase IV was completed and commissioned in early 2022. The products in the first phase involve four varieties of Difenoconazole, nitrosulfuron, bifenthrin and haloperidol. At present, the company has become a global manufacturer with core advantages in the field of pyrethroids, and the number of pyrethroid products ranks among the top in the world. The company’s market share of sanitary pyrethrin in China is about 70%, and the production capacity of dicamba ranks in the leading position in the world. Youjia company was rated as the first batch of green factories in China by the Ministry of industry and information technology. In 2021, the company won the top 20 CAC pesticide export and ACE excellent supplier, and continued to rank second among the top 100 in China’s agrochemical industry. The industry influence of the company was further improved.
Investment advice
We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 1.627 billion, 2.324 billion and 3.103 billion, EPS will be 5.25 yuan, 7.50 yuan and 10.01 yuan respectively, corresponding to the closing price of the company on March 28 of 117.26 yuan, PE will be 22.3 times, 15.6 times and 11.7 times respectively. Maintain the “overweight” rating.
Risk tips
Abnormal climate risk, exchange rate risk, safety and environmental protection risk, raw material price fluctuation risk, and the risk that the demand is lower than expected.
