Benefiting from the rise of glyphosate price, listed companies in glyphosate industry performed well in 2021, which aroused widespread concern in the market. According to the statistics of Hithink Royalflush Information Network Co.Ltd(300033) , as of January 11, five glyphosate companies have disclosed the performance forecast for 2021, all of which are increased in advance. Among them, four companies such as Hubei Xingfa Chemicals Group Co.Ltd(600141) , Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) , Nantong Jiangshan Agrochemical & Chemicals Co.Ltd(600389) , Shenzhen Noposion Agrochemicals Co.Ltd(002215) are expected to double the annual performance in 2021.
Boosted by this, glyphosate concept stocks have been active since the new year. The sector as a whole rose 0.51%, outperforming the Shanghai Composite Index (a cumulative decline of 1.99% during the period). Among them, the stock prices of the five concept stocks rose during the period, Shandong Weifang Rainbow Chemical Co.Ltd(301035) led the cumulative increase, reaching 20.55%, and the cumulative increase during Nanjing Red Sun Co.Ltd(000525) also reached 4.32%.
In this regard, Liu Youhua, research director of private placement network, interviewed by the reporter of Securities Daily, said, “The outstanding performance of glyphosate industry in 2021 mainly benefited from the rising price of glyphosate. Under the dual factors of the cost promotion of raw material price rise and the contradiction between supply and demand, the price of glyphosate went up all the way. The data show that the price of glyphosate increased from 28000 / T at the beginning of last year to 81000 / T, an increase of nearly three times, which led to a sharp increase in the profits of glyphosate enterprises Promotion. “
the prosperity of glyphosate industry continues to rise
Among the five companies that have disclosed the performance forecast for 2021, Hubei Xingfa Chemicals Group Co.Ltd(600141) is expected to have the largest year-on-year increase in net profit in 2021, reaching 605.19%. Hubei Xingfa Chemicals Group Co.Ltd(600141) the relevant person in charge said that the company has a capacity of 180000 T / a glyphosate, ranking first in China. The company’s Glyphosate orders have been scheduled to April 2022. The company expects to achieve a net profit of RMB 4.2 billion-4.4 billion attributable to shareholders of Listed Companies in 2021, with a year-on-year increase of 573.14% – 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%.
Hubei Xingfa Chemicals Group Co.Ltd(600141) the main reasons for the significant increase in performance last year are: first, benefiting from the recovery after the global economic epidemic, the chemical industry ushered in a boom cycle during the reporting period. The sales prices of the company’s main products such as silicone, glyphosate, dimethyl sulfoxide and yellow phosphorus increased significantly year-on-year, and the profitability was significantly enhanced. Second, the 3 million T / a low-grade collophanite beneficiation and deep processing project funded by the company’s non-public offering of shares in 2018 was successfully put into operation after full trial operation during the reporting period, and the 400000 T / a synthetic ammonia project of Yichang xingxinglantian Technology Co., Ltd., a joint-stock company, was successfully started at the end of the second quarter of last year, It has brought new profit growth points to the company. Third, during the reporting period, the company made positive progress in the market development of electronic grade chemicals, in which the sales volume of electronic grade phosphoric acid, sulfuric acid, mixed solution and other high value-added products connected with semiconductor customers increased significantly, and the operating performance increased significantly.
At the same time, Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) on 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%. The company said that the significant year-on-year increase in the sales price of glyphosate, the main product, and the significant enhancement of profitability are one of the main reasons for the significant advance increase in performance.
“The improvement of glyphosate supply pattern at home and abroad and the enhancement of demand have led to the continuous rise of industry prosperity.” Guosen Securities Co.Ltd(002736) said that after a series of production restriction policies and environmental supervision in 2021, the global and Chinese glyphosate supply side pattern was reshaped, and the industry concentration continued to increase; Meanwhile, with the upgrading of the global food security strategy and the continuous approval of genetically modified crops in the field of domestic staple food, the demand for glyphosate at home and abroad has increased. As of December 31, 2021, the price of glyphosate has reached 80000 yuan / ton, more than three times the price at the beginning of last year, and the profit per ton can exceed 30000 yuan / ton. Both sides of supply and demand continue to improve. We continue to be optimistic that glyphosate prices will remain high in the next year.
Citic Securities Company Limited(600030) the research report predicts that the global demand for glyphosate will continue to grow. In addition to the growth of planting area caused by the boost of grain prices in the short and medium term, this growth also comes 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.
Long Hao, chairman of Jinding assets, told reporters, “Due to the rise in the price of bulk commodity raw materials, the market price of glyphosate is rising. As a gathering production place of global production capacity, China is driven by the awareness of increasing inventory abroad. At the same time, the glyphosate industry is restricted by environmental protection policies, and there is little hope for expanding production and new investment. The phenomenon of industry integration and M & a further highlights the oligarchy characteristics in the glyphosate industry, and the performance of relevant companies will continue to benefit In particular, overseas glyphosate production enterprises, affected by the epidemic, are unable to meet the demand for self-sufficiency, and the demand for the output of relevant Chinese enterprises has increased. It can be seen that the profits of these enterprises are expected to further improve in 2022. “
The valuation of plate is at the historical bottom
In terms of valuation, up to now, the latest dynamic P / E ratio of glyphosate plate is 22.13 times. The plate valuation is at the bottom of history. The latest dynamic P / E ratio of five concept stocks is lower than this level, accounting for more than 40%. Among them, the latest valuations of Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) , Sichuan Hebang Biotechnology Co.Ltd(603077) , Hubei Xingfa Chemicals Group Co.Ltd(600141) and other three concept stocks are less than 20 times, with significant valuation advantages.
In the environment of rising industry prosperity, institutions\’ attention to glyphosate concept stocks began to rise recently. Statistics show that six glyphosate concept stocks have received favorable ratings such as “buy” or “overweight” from institutions in recent 30 days. Among them, Hubei Xingfa Chemicals Group Co.Ltd(600141) has been recommended by institutions for six times recently, and five concept stocks such as Shandong Weifang Rainbow Chemical Co.Ltd(301035) , Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) , Nantong Jiangshan Agrochemical & Chemicals Co.Ltd(600389) , Shenzhen Noposion Agrochemicals Co.Ltd(002215) , Sichuan Hebang Biotechnology Co.Ltd(603077) have been recommended by institutions for two or more times during the period.
For the investment opportunities in glyphosate sector, Long Hao said, “In the future, leading enterprises in the glyphosate industry will accelerate the merger of small and medium-sized enterprises and eliminate the increase of production capacity. Under the background of stricter environmental protection supervision and limited investment in new production capacity in the future, it is optimistic that the price of glyphosate will continue to remain high. Technically, the share prices of some glyphosate manufacturers have fallen in the near future, the valuation has entered a reasonable range, and there are obvious signs of shock bottoming Good industry leading stocks in the coming year, the stock price will have the opportunity to intervene after stepping back. “
Guosen Securities Co.Ltd(002736) it is suggested to focus on the leading companies in glyphosate industry Nantong Jiangshan Agrochemical & Chemicals Co.Ltd(600389) (223000 tons), Hubei Xingfa Chemicals Group Co.Ltd(600141) (180000 tons), Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) (80000 tons), Jiangsu Yangnong Chemical Co.Ltd(600486) (30000 tons), glyphosate leading Sichuan Hebang Biotechnology Co.Ltd(603077) (200000 tons), etc.
Table : list of glyphosate companies that have disclosed the performance forecast for 2021
prepared by Ren Shibi
(source: Voice of Securities Daily)
