\u3000\u3 China Vanke Co.Ltd(000002) 250 Lianhe Chemical Technology Co.Ltd(002250) )
Event: on the evening of April 21, the company released its 2021 annual report. In 2021, the company realized an operating revenue of 6.587 billion yuan, an increase of 37.75% year-on-year; The net profit attributable to the parent company was 315 million yuan, a year-on-year increase of 186.65%. In 2021, Q4 company achieved an operating revenue of 1.847 billion yuan, a year-on-year increase of 36.06% and a month on month increase of 6.98%; The net profit attributable to the parent company was 38 million yuan, turning losses into profits year-on-year, down 57.18% month on month.
Comments:
The sales volume of main products increased greatly, and the company’s performance continued to improve. The resumption of production at the company’s Jiangsu production base in 2021 greatly improved the capacity utilization of the company’s plant protection business, and the capacity utilization of herbicides and pesticides increased by 38.2pct and 16.8pct respectively year-on-year, which led to a significant increase in the company’s product sales and promoted the growth of the company’s performance. In 2021, the company sold 11585 tons of herbicides and intermediates, a year-on-year increase of + 113.5%; The sales volume of pesticides and intermediates was 4274 tons, a year-on-year increase of + 52.9%; Sales of fungicides and intermediates were 2766 tons, a year-on-year increase of + 13.4%; The sales volume of pharmaceutical intermediates was 1449 tons, a year-on-year increase of + 13.44%; The sales volume of functional chemicals was 33716 tons, a year-on-year increase of 53.8%. In 2021, the company’s gross profit margin was 26.9%, a decrease of 9.2pct compared with 2020, of which the gross profit margin of pharmaceutical business was 40.66%, a year-on-year decrease of 1.77pct; The gross profit margin of plant protection business was 22.98%, down 8.50pct year-on-year.
Although the gross profit margin of the company decreased slightly due to the sharp rise in the price of raw materials. However, benefiting from the rapid rise in capacity utilization and product sales, the company still achieved a significant growth in performance.
Capacity planning continued to advance, and the pharmaceutical business was steadily developed. By the end of 2021, the company has a production capacity of 21005 tons / year of herbicides and intermediates; The production capacity of pesticides and intermediates is 8265 tons / year; The production capacity of fungicides and intermediates is 6097 tons / year; The production capacity of pharmaceutical intermediates is 2166 tons / year; The capacity of functional chemicals is 51131 tons / year. In addition, the construction of Linhai Lianhua production base of the company has been steadily promoted. At the same time, the technical transformation project of 40000 t / a phosgene and downstream products, the 345 fluorophenylaniline project with an annual output of 1000 tons and the methyl aminofluoroate hydrochloride project with an annual output of 250 tons are also in orderly progress. In order to continuously consolidate its technical advantages, the company has never relaxed its R & D investment. In 2021, the R & D investment was 317 million yuan, with a year-on-year increase of 20.69%, and the revenue accounted for 4.81%. With technical advantages and high-quality services, the company completed the process validation of more than 8 new molecular registered intermediates and APIs projects in 2021. By the end of 2021, the number of products in the commercialization stage, clinical phase III stage and other clinical stages of the company’s pharmaceutical business was 17 (year-on-year + 2) / 33 (year-on-year-3) / 69 (year-on-year + 9) respectively.
Profit forecast, valuation and rating: due to the impact of rising raw material prices, the company’s performance in 2021 was slightly lower than previously expected. Considering the gradual recovery of the company’s capacity utilization and the gradual increase of subsequent new capacity, and the continuous high boom of the agrochemical industry under the background of high grain prices, the company’s performance will develop better. We maintain the company’s profit forecast for 20222023 and the profit forecast for 2024 for new companies. It is estimated that the net profit attributable to the parent company in 20222024 will be 566 / 819 / 1067 million yuan respectively. We still maintain the company’s “buy” rating.
Risk tip: price fluctuation of products and raw materials, environmental protection and safety production risks, and capacity construction is less than expected.
