\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Event: Jiangsu Yangnong Chemical Co.Ltd(600486) released the annual report of 2021, realizing an operating revenue of 11.841 billion yuan, a year-on-year increase of 20.45%; The operating profit was 1.444 billion yuan, a year-on-year increase of 0.71%; The net profit attributable to shareholders of listed companies was 1.222 billion yuan, a year-on-year increase of 1.02%, and the net profit after deducting non recurring profits and losses was 1.137 billion yuan, a year-on-year increase of 4.32%. Based on the total share capital of 310 million shares, the diluted earnings per share was 3.94 yuan (3.67 yuan after deducting non-profit), and the operating cash flow per share was 4.69 yuan. Among them, the operating revenue in the fourth quarter was 2.600 billion yuan, a year-on-year increase of 38.67%; The net profit attributable to the shareholders of the listed company was 207 million yuan, a year-on-year increase of 10.71%; Equivalent to EPS 0.67 yuan in a single quarter.
The overall sales scale increased significantly, but the gross profit margin decreased due to the increase of cost and the proportion of low gross profit margin trading business. In 2021, the company’s operating revenue was yoy + 2.01 billion yuan. According to business, the revenue of original medicine business was yoy + 819 million yuan, preparation business was yoy-146 million yuan, and trade business was yoy + 1.298 billion yuan. Technical drugs and trade business is the core of revenue growth.
The company’s comprehensive gross profit margin is 23.06%, yoy-3.25pcts; Gross profit yoy + 144 million yuan. In terms of business, the gross profit margin of the original drug business is 26.18%, yoy-1.20 PCTs, and the gross profit is yoy + 140 million yuan; The gross profit margin of preparation business is 37.6%, yoy + 2.45 PCTs, and the gross profit is yoy-02 million yuan; The gross profit margin of trade business is 5.66%, yoy-293 PCTs, and the gross profit is yoy + 33 million yuan. In 2021, covid-19 epidemic, dual control of energy consumption and strict supervision of safety and environmental protection, and the general sharp rise in the price of basic raw materials were the core reasons for the reduction of the company’s overall gross profit margin (especially the high altitude medicine business). On the other hand, the significant increase in the proportion of trading business revenue with relatively low gross profit margin (from 14% in 2020 to 23% in 2021) also had an impact on the decline of the overall gross profit margin. During the period, the company’s expenses increased by about 93 million yuan year-on-year, and the sales / management / R & D / financial expenses were yoy + 0.50 / + 0.81 / + 0.41 / – 80 million yuan respectively. The sales expenses increased due to the increase of royalties, the management expenses mainly due to the increase of sewage expenses, while the increase of financial expenses was mainly due to the decrease of exchange losses.
Increase cooperation with Zhengda in the fourth phase. The company plans to invest about 1.8 billion yuan in the construction of Nantong phase IV project. The first phase will be completed and commissioned in early 2022. The products in the first stage involve four varieties of Difenoconazole, nitrosulfuron, bifenthrin and haloperidol, which is expected to become an important growth point of the company in 2022.
The company expects to sell products and provide services to Syngenta and its related parties totaling 5.59 billion yuan in 2022, with a year-on-year increase of 55.3%, of which 4.5 billion yuan was sold to Syngenta A.G. (consolidated), with a year-on-year increase of 60%. In 2021, the sales of the company’s top five customers were 4.5 billion yuan, accounting for 38.03% of the total sales; Among the top five customers, the sales of related parties amounted to 3.2 billion yuan, accounting for 27.18% of the total annual sales. It is worth looking forward to continuously increasing cooperation with Syngenta in all aspects.
Profit forecast and Valuation: considering the production of the company’s new projects and the trend of product prices, the company’s net profits from 2022 to 2024 are expected to be 1.9 billion yuan, 2.2 billion yuan and 2.5 billion yuan respectively (the values before 2022 and 2023 are 1.79 billion yuan and 2.12 billion yuan respectively), maintaining the “buy” investment rating.
Risk tips: the pesticide boom is down, the product price is down, the price of raw materials fluctuates sharply, and the progress and profitability of new projects are lower than expected.
