\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Event: on March 28, 2022, Jiangsu Yangnong Chemical Co.Ltd(600486) ( Jiangsu Yangnong Chemical Co.Ltd(600486) ) released the annual report of 2021: the operating revenue in 2021 was 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%; The weighted average return on net assets was 17.6%, down 2.74 percentage points year-on-year. The gross profit margin of sales was 23.06%, a year-on-year decrease of 3.25 percentage points; The net profit margin on sales was 10.33%, down 1.99 percentage points year-on-year. The cash flow from operating activities was 1.454 billion yuan, a year-on-year increase of + 5.55%. Among them, Q4 achieved a revenue of 2.6 billion yuan in 2021, a year-on-year increase of + 38.67% and a month on month increase of + 1.59%; The net profit attributable to the parent company was 207 million yuan, up + 10.71% year-on-year and – 7.83% month on month; The weighted average return on net assets was 3.02%, down 0.17 percentage points year-on-year and 0.36 percentage points month on month. The gross profit margin of sales was 22.40%, a year-on-year decrease of 3.95 percentage points and a month on month increase of 1.03 percentage points; The net profit margin on sales was 7.93%, down 2.02 percentage points year-on-year. The cash flow from operating activities was – 390000 yuan, a year-on-year increase of – 97.1%.
Comments:
In 2021, it is difficult to achieve a year-on-year growth of 20.45%
In 2021, the company achieved a revenue of 11.841 billion yuan, crossed the 10 billion mark for the first time, with a year-on-year increase of 20.45%, realized a net profit attributable to the parent of 1.222 billion yuan, with a year-on-year increase of 1.02%, and achieved a good start in the 14th five year plan. The sales of technical drugs increased significantly, and the sales of technical drugs increased by 13.2%. In terms of product volume and price, the company’s Youjia phase III project was completed and put into operation in the second half of 2020. In 2021, the production and sales of the company’s products increased year-on-year, with the sales volume of pesticides of 162.26 million tons, a year-on-year increase of + 5.3%, and the annual average sales price of 184000 yuan / ton, a year-on-year increase of – 3.4%; The sales volume of herbicides was 54861 tons, with a year-on-year increase of + 8.8%. The annual average sales price was 48500 yuan / ton, with a year-on-year increase of + 4.8%. The profit growth rate of the company is significantly lower than that of revenue. This is mainly due to the significant increase in the price of raw and auxiliary materials in the upstream under the influence of the energy consumption double control power and production restriction policy, but the transmission to the downstream lags behind. According to the operating data disclosed by the company, in 2021, the main raw materials of the company, except methylfuran, decreased slightly by 3.4%, while others increased. Isobutyraldehyde, phosphorus trichloride, isoprene and isobutene increased by 126.6%, 55.9%, 48.6% and 23.8% respectively year-on-year. In 2021q4, pesticide prices hit a record high, curbing the enthusiasm of downstream manufacturers to take goods, and the sales of pesticides and herbicides of the company fell. Specifically, the sales volume of pesticides was 1932 tons, with a year-on-year ratio of – 37.3% and a month on month ratio of – 33.6%. The average sales price was 218700 yuan / ton, with a year-on-year ratio of + 23.2% and a month on month ratio of + 14.5%; The sales volume of herbicides was 10655 tons, with a year-on-year ratio of – 5.1% and a month on month ratio of – 24.1%. The average sales price was 66700 yuan / ton, with a year-on-year ratio of + 30.2% and a month on month ratio of + 57.8%.
Tracking the market prices of the company’s main pesticide products, it is found that in 2021, except for the decline of dicamba and Difenoconazole, the prices of other pesticide products increased year-on-year. However, due to the implementation of long-term price system in the company’s sales, the actual average price did not release the actual increase in the market.
The volume and price rose from January to February, and the performance in the first quarter is expected to achieve high growth
On March 9, 2022, the company disclosed the operating data from January to February 2022. After preliminary accounting, the company realized an operating revenue of about 3.5 billion yuan from January to February 2022, an increase of about 50% year-on-year; The net profit attributable to the parent company was about 560 million yuan, with a year-on-year increase of about 100%. First, Youjia phase III project was fully completed and put into operation in the third quarter of 2020, and the production capacity of pyrethroid pesticides in phase III project was 10825 tons. In addition, according to the company’s annual report in 2021, the first phase of Youjia phase IV has been completed and commissioned in early 2022. The products in the first phase involve four varieties of Difenoconazole, nitrosulfuron, bifenthrin and haloperidol. It is expected that the company’s production capacity will be greatly increased in 2022. Second, the prices of major pesticide products increased compared with the same period last year. Although the pesticide prices have dropped since early November last year, they are still at a medium high level, and the acceptance of downstream manufacturers for product price increases has increased compared with last year.
Fully promote the construction of Youjia phase IV Project
According to the company’s environmental assessment report, the phase IV Project of Youjia includes 7310 tons of pyrethroids, 1000 tons of haloperidol, 6000 tons of nitrosulfuron, 3000 tons of Difenoconazole, 2000 tons of propiconazole, 1000 tons of loudiuron, 200 tons of hydroxypiperin, 500 tons of synergist, 4500 tons of internal supporting intermediates and 4837336 tons of by-products. The phase IV project can increase the operating income by 2.987 billion yuan and the profit by 386 million yuan. According to the company’s 2021 annual report, the investment of Youjia phase IV is expected to be 1.809 billion yuan. At present, the cumulative investment is 900 million yuan, accounting for 49.75%. One phase has been completed and put into trial production in 2022, and the remaining capacity under construction is expected to be completed by the end of 2022.
Give full play to Syngenta’s strategic synergy and gradually increase its global market share
Syngenta group completed the transfer of 36.17% equity of the company in July 2021 and obtained the controlling stake of the company. Syngenta group carries out plant protection business in many countries, which coincides with the company’s business in crop protection products in Australia, Thailand, the Philippines and India. Syngenta group promises in the acquisition report that it will gradually and steadily promote the integration of relevant businesses by comprehensively using various methods such as asset restructuring, business adjustment, entrusted management and the establishment of joint ventures, so as to solve the problem of competition. In 2021, the company’s overseas trade revenue increased by 93.4% year-on-year. In the future, the company and Syngenta will continue to reduce overseas horizontal competition through business cooperation and promote the overall strategic coordination of the group. With the help of Syngenta group’s platform advantages and global customer resources, the company’s share in the global market is expected to further increase.
Technological innovation drives development, and project investment adds new momentum
With the goal of “striving to be the source of original technology and the leader of modern industrial chain”, strive to build a technology driven innovative enterprise. Accelerate the industrialization of existing technological achievements and improve the transformation efficiency and quality. Continue to do a good job in product research and development, further increase the research and development of creative compounds, carry out joint research and development according to the market demand, optimize the technical level and extend the industrial chain; Continue to strengthen the research on different dosage forms such as external environment, household sanitation and agriculture, and carry out production commissioning as planned. With the goal of “high efficiency, high quality and high level”, we will make concerted efforts to promote the construction of Sinochem Plant Protection Industrial Park, youshiqingshan plant area, new plant protection base and other projects, so as to add more momentum to the follow-up development of the company.
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 1.937 billion yuan, 2.278 billion yuan and 2.592 billion yuan respectively, and the EPS will be 6.25, 7.35 and 8.36 yuan / share, corresponding to 19, 16 and 14 times of PE, maintaining the “buy” rating.
Risk tips: the spread of the epidemic in China, the price fluctuation of products and raw materials, the difficulty of company reorganization, integration, management and coordination, the failure of project production to meet expectations, environmental protection and production safety risks
