\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 035 Shandong Weifang Rainbow Chemical Co.Ltd(301035) )
Event: the company released its annual report for 2021. In 2021, it achieved a revenue of 9.797 billion yuan, a year-on-year increase of + 34.39%, and a net profit attributable to the parent company of 800 million yuan, a year-on-year increase of + 82.74%. In the fourth quarter, it achieved a revenue of 3.039 billion yuan, a year-on-year increase of + 114.44%, and a net profit attributable to the parent company of 350 million yuan, a year-on-year increase of + 375094%, a month on month increase of + 100.00%. The company plans to distribute a cash dividend of 8.33 yuan (including tax) for every 10 shares. The company’s annual.
The global demand for agrochemical products is strong, and the annual performance has increased significantly year-on-year. In 2021, the gross profit margin of the company was 18.97%, with a year-on-year increase of 1.83 percentage points, and the net profit margin was 8.64%, with a year-on-year increase of 2.26 percentage points. We expect that it is due to the strong demand for pesticides abroad and the rise of product prices; The operating cash flow was 791 million yuan, a year-on-year increase of + 54.49%, mainly due to the increase of sales revenue collection during the reporting period; The construction in progress was 282 million yuan, a year-on-year increase of + 40.30%, mainly due to the continuous investment in the construction of projects invested with raised funds. The R & D cost was 312 million yuan, a year-on-year increase of + 37.44%, mainly due to the increase of investment in research projects and labor costs; The asset liability ratio was 51,09%, a year-on-year decrease of 8.77 percentage points. The high Shenzhen Agricultural Products Group Co.Ltd(000061) price of bulk commodities has driven the global demand for agricultural and chemical products. The company’s revenue and net profit increased significantly in 2021, and the annual performance met expectations.
“Light structure and rapid response”, build a global “rapid market entry platform”, and the company’s global market share has increased steadily. The company has more than 60 subsidiaries overseas, covering more than 80 countries around the world. Its export volume has ranked first in China for many years. It is the only multinational crop protection company born in China. The core operation team of the company has focused on the field of global crop protection for more than 20 years and has a keen insight into the trend of the global agrochemical market. Based on a thorough understanding of the whole process of the industry and the characteristics of “light structure and rapid response”, the company has built a global “rapid market entry platform”. According to the company’s strategic plan, it will be in addition to the United States, Canada The construction of “fast market entry platform” for major global markets outside Japan has been preliminarily completed, and the construction of “fast market entry platform” for all major global markets has been completed during 20252029. At present, the company accounts for less than 3% of the world’s major agrochemical cities in Brazil, Argentina and the United States. In the future, it is expected to continuously expand the global market share with the advantages of differentiated and cost-effective products.
The overseas independent registration mode creates a high barrier moat. The company’s pesticide sales mainly adopts the combination of traditional export and overseas independent registration model. The overseas independent registration model has barriers such as large investment in registration certificate, long time of obtaining certificate and high technical requirements. By the end of 2021, the company has obtained 4007 pesticide registration certificates overseas, an increase of about 30% over 2020. The scale of the registration team has increased from 69 in 2020 to 119 at present. Under the independent registration mode, the bargaining power of downstream customers is enhanced. Benefiting from the company’s mature independent registration system, the number of overseas independent registration certificates of the company increases steadily every year, and the new registration and original registration products contribute to the stable revenue of the company.
Profit forecast and investment suggestions: we expect the company’s revenue from 2022 to 2024 to be RMB 11.685144.31/17.455 billion respectively; The net profit attributable to the parent company was 950 / 1181 / 1436 million yuan respectively, with a year-on-year rate of 18.8% / 24.5% / 21.6%, EPS of 3.44, 4.28 and 5.20 yuan / share, and the corresponding PE of the current stock price was 22.2/17.9/14.7 times, maintaining the “buy” rating.
Risk tips: sharp fluctuation of raw material price, safety production risk, sharp fluctuation of exchange rate risk and policy risk of overseas pesticide importing countries
