Benefiting from the soaring price of glyphosate, a number of listed companies mainly engaged in glyphosate recently predicted the 2021 annual report. Among them, Shandong Weifang Rainbow Chemical Co.Ltd(301035) reaped the limit on January 10 because its performance far exceeded expectations, the share price hit a record high, and led to the collective rise of glyphosate plate. The performance increased by 591} times in 2026.
According to the Research Report of securities companies, affected by factors such as low inventory, limited new production capacity and strong demand, the glyphosate price will maintain a high prosperity level in the future, and the price center is expected to continue to rise.
2021 annual performance forecast
On January 7, Shandong Weifang Rainbow Chemical Co.Ltd(301035) which is mainly engaged in glyphosate preparation products released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach RMB 700 million to RMB 850 million in 2021, with a year-on-year increase of 59.95% to 94.23%. The net profit attributable to the parent company in the first three quarters of 2021 was 450 million yuan. According to this calculation, the net profit of the company in the fourth quarter of 2021 is 250 million yuan to 400 million yuan, far exceeding 9.08 million yuan in the same period of 2020.
For the reasons for the performance growth, Shandong Weifang Rainbow Chemical Co.Ltd(301035) said that during the reporting period, the food security concerns caused by the covid-19 pneumonia epidemic boosted the strong demand for global bulk Shenzhen Agricultural Products Group Co.Ltd(000061) and the bulk Shenzhen Agricultural Products Group Co.Ltd(000061) prices continued to remain high. The high operation of bulk Shenzhen Agricultural Products Group Co.Ltd(000061) prices has led growers to expand the planting area and increase the investment in agricultural inputs. The overall demand for global crop protection products is booming, and the sales and prices of the company's main products have increased.
Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) , Hubei Xingfa Chemicals Group Co.Ltd(600141) and Shenzhen Noposion Agrochemicals Co.Ltd(002215) belonging to glyphosate also issued a very bright performance forecast for 2021.
Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) on the evening of January 10, the company issued an announcement of performance pre increase. The company expects to achieve a net profit of 2.6 billion yuan to 2.7 billion yuan in 2021, with a year-on-year increase of 344% to 362%. Hubei Xingfa Chemicals Group Co.Ltd(600141) it is expected to achieve a net profit of 4.2 billion yuan to 4.4 billion yuan in 2021, with a year-on-year increase of 573.14% to 605.19%; The net profit deducted from non profit was 4.45 billion yuan to 4.65 billion yuan, with a year-on-year increase of 604.05% to 635.70%. Both Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) and Hubei Xingfa Chemicals Group Co.Ltd(600141) said that the sales price of glyphosate, the main product, rose sharply year-on-year, and the significant enhancement of profitability was one of the main reasons for the significant increase in performance. According to the semi annual report of 2021, Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) has an existing glyphosate production capacity of 80000 tons / year, with an annual output of about 85000 tons. More than 10000 tons of technical drugs are purchased for preparation production every year, and the annual sales volume is equivalent to nearly 100000 tons of technical glyphosate; Hubei Xingfa Chemicals Group Co.Ltd(600141) has a capacity of 180000 T / a glyphosate, ranking first in China.
Shenzhen Noposion Agrochemicals Co.Ltd(002215) it is estimated that the net profit in 2021 will reach 250 million yuan to 334 million yuan, with a year-on-year increase of 50% to 100%. The company said that during the reporting period, the sales volume of pesticide preparation business increased, the gross profit margin of products increased significantly, and the gross profit increased accordingly. Shenzhen Noposion Agrochemicals Co.Ltd(002215) on December 13, 2021, the company said on the investor interaction platform that the sales of glyphosate related pesticide products of the company were good in 2021.
glyphosate prices are expected to remain high
Glyphosate is the most widely used herbicide in the world, accounting for about 30% of the global herbicide market. Affected by the contradiction between supply and demand, the price of glyphosate soared all the way in 2021. According to the data of Baichuan Yingfu, the average price of glyphosate in the national mainstream market was 80000 yuan / ton on December 31, 2021. Compared with the price of less than 28000 yuan / ton at the beginning of 2021, the annual increase of glyphosate price is more than 185%.
There are three main reasons for the rise in glyphosate prices: first, the rise in raw material prices has led to a significant increase in production costs, which has promoted the price of glyphosate. Second, on the supply side, glyphosate production capacity grew slowly under the background of low inventory. From 2017 to 2021, the compound annual growth rate of glyphosate production capacity in China was 1.2%. According to the data of Baichuan Yingfu, the new capacity of glyphosate is still limited in the next one to two years. Except that Inner Mongolia Xingfa Technology Co., Ltd. (subordinate to Hubei Xingfa Chemicals Group Co.Ltd(600141) ) will add 50000 tons of capacity in 2022, other companies did not disclose the new capacity. Third, on the demand side, affected by the epidemic, global food security has been highly concerned, stimulating the demand for agricultural materials in major food producing countries, including Brazil and Argentina. In 2021, the rise of global crop prices has boosted farmers' planting enthusiasm, the demand for glyphosate has increased significantly, and the rising sea freight has affected the sales of glyphosate products.
Looking forward to the future, Citic Securities Company Limited(600030) the research report predicts that the global demand for glyphosate will continue to grow. This growth comes not only from the growth of planting area caused by the boost of grain prices in the short and medium term, but also from the continuous delisting of some highly toxic pesticides, such as Paraquat. The price center of glyphosate is expected to continue to rise under the background of global demand growth and strict environmental protection supervision, resulting in no new production capacity of glyphosate in the short term.
Guosheng Securities Research Report believes that after a series of production restriction policies, the glyphosate supply side pattern will be reshaped and the industry concentration will continue to improve. In the future, with the upgrading of global food security strategy and the continuous approval of genetically modified crops, the demand for glyphosate at home and abroad will increase. It is optimistic that the price of glyphosate will maintain a high prosperity level in the next year, and the price increase is expected to exceed expectations.
(source: Shanghai Securities News)
