\u3000\u3 China Vanke Co.Ltd(000002) 258 Lier Chemical Co.Ltd(002258) )
Key investment points
Event: the company released the performance express for the first quarter of 2022. In the first quarter, the operating revenue was 2.613 billion yuan, an increase of 76.3% year-on-year and 18.0% month on month; The net profit attributable to the parent company was 534 million yuan, a year-on-year increase of 142.0% and a month on month increase of 15.8%.
In the first quarter, the revenue increased against the trend and the profitability remained stable. In the first quarter of 2022, under the expectation of the delay of terminal demand and the release of new production capacity, the wait-and-see mood in the downstream of glufosinate was heavy, and the price fell significantly, reaching a minimum of 175000 yuan / ton at one time, and the average price in the first quarter was 268000 yuan / ton, down 26.2% month on month. Against the trend, the operating profit margin and net profit margin of the company in the first quarter were 26.8% and 20.4% respectively, down only 0.9 and 0.4 percentage points month on month, and the revenue and profit still increased month on month. We judge that the main reason is that the technical transformation of Guang'an base is completed, the production and sales of glufosinate are increased, and the company may lock the price of glufosinate through a long-term contract. Recently, with the arrival of the peak sales season outside China and the centralized release of downstream demand in the early wait-and-see stage, some Chinese production enterprises have stopped receiving orders. In addition, the production and environmental protection barriers of glyphosate are high, and the actual release of new production capacity is limited. At present, the price of glyphosate has rebounded to 189000 yuan / ton. We expect that glyphosate will usher in price repair.
The substitution of highly toxic pesticides and the promotion of genetically modified organisms have driven the rapid growth of demand for glufosinate. Highly toxic pesticides are gradually banned worldwide. For example, 14000 tons of paraquat will be banned in 2020. At the same time, the global GM planting area is growing steadily at a rate of about 5% per year, and the demand for glyphosate resistant crops is expected to grow simultaneously. In addition, the demand growth from glyphosate and glufosinate ammonium combination is also considerable. As the leader of glyphosate, the company will fully benefit from the product boom.
The company is the leader of chlorinated pyridine pesticides, with significant integration advantages. The company is the second largest supplier of chlorinated pyridine pesticides in the world. At present, it has a production capacity of 2800 tons of bikecao, 3000 tons of chlorpyrimidine, 1300 tons of fluorograss and 1500 tons of chlorpyrimidine. Its subsidiary Hebi Secco has the production capacity of relevant intermediates to provide reliable raw material guarantee. Under the background of stricter requirements on energy consumption and environmental protection, it is judged that chlorinated pyridine products will maintain a high profit center in the future.
Relying on the moat of technical barriers, innovative companies have full growth. The company took the lead in the layout of l-glufosinate and built 3000 tons and 20000 tons of production capacity in Guang'an and Mianyang respectively. The former is expected to be put into operation in 2022. The application amount of l-glufosinate is only half of that of ordinary glufosinate, which will accelerate the upgrading. In addition, the company reserves new varieties such as oxazolidinyl ester, chlorfenoxamide and flame retardant to support the long-term development of the company.
Profit forecast and investment suggestions. It is estimated that the company's EPS from 2022 to 2024 will be 2.79 yuan, 3.34 yuan and 4.07 yuan respectively. As the leader of glufosinate and Chloropyridine pesticides, the company has strong R & D and engineering development capacity, rich reserve projects, strong certainty of future growth, and maintains the "buy" rating.
Risk warning: the project under construction is not put into operation as expected; The price of raw materials rose sharply and the price of main products fluctuated.
