\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Event: the company released its first quarterly report on April 25, 2022. In the first quarter of 2022, it achieved an operating revenue of 5.268 billion yuan, a year-on-year increase of 42.08%, a net profit attributable to the parent company of 904 million yuan, a year-on-year increase of 103.51%, and a net profit deducted from non parent company of 894 million yuan, a year-on-year increase of 93.9%.
Comments:
Volume and price rise together + advantages of the whole industrial chain to create the best quarter. The net profit attributable to the parent company doubled in the first quarter of 2022, mainly due to two reasons: ① the rise of product volume and price. Price side: according to the operating data of the first quarter disclosed by the company (Unaudited), the average sales price of technical drugs was 112100 yuan / ton, up 41.26% year-on-year; The average sales price of the preparation was 55500 yuan / ton, a year-on-year increase of 77.21%. Sales side: thanks to the full production of Youjia phase III project and the completion and operation of phase I of phase IV project, the unit capacity, product output and sales volume increased year-on-year. The total sales volume of pesticides and herbicides in 2021 was 71000 tons, while the sales volume of technical drugs (including pesticides, herbicides and other bulk drugs) in the first quarter of 2022 reached 28000 tons. ② Advantages of the whole industrial chain. Although the prices of upstream raw materials increased in varying degrees year-on-year in the same period, the company, as the only enterprise in China in the pyrethroid pesticide industry that starts to synthesize intermediates from basic chemical raw materials and produces pyrethroid technical drugs, has the advantage of complete industrial chain and low cost. Looking forward to the whole year, we believe that under the background of high upstream raw material prices and downstream Shenzhen Agricultural Products Group Co.Ltd(000061) prices, pesticide prices are expected to remain strong throughout the year and promote the company’s annual performance to maintain high growth.
The overall plan is implemented by stages, and Youjia phase IV is gradually put into operation, and the development has entered the fast lane. In 2013, the company established a wholly-owned subsidiary “Jiangsu Youjia plant protection Co., Ltd.” in Rudong County, Nantong City, Jiangsu Province, and planned the phase IV Project of “Youjia plant protection”. The total investment of phase I project is 614 million yuan, which was started in February and put into operation in December 2014; The investment of phase II project is 1.98 billion yuan, which was started in 2015 and put into operation in 2017; The investment of phase III project is 2.13 billion yuan, which will be started in 2019 and put into operation in Q3 in 2020; The phase IV project, with an investment of 2.33 billion yuan, was started in December 2020 and completed and put into operation in three stages. Phase IV Project will add 3800 tons of bifenthrin, 1000 tons of haloperidol, 6000 tons of nitrosulfuron, 3000 tons of Difenoconazole, 2000 tons of propiconazole and 3000 tons of chloroacetophenone and their by-products. The installation of the project will be completed in November 2021; In December, complete the purging, pressure test, leakage test, inspection and acceptance of equipment and pipelines; On January 25, 2022, the company announced the trial production of Youjia phase IV Project on its official website. By April 2022, the capacity of trial production (including Difenoconazole, nitrosulfuron, bifenthrin and haloperidol) has reached more than 80% of the design standard. The second phase of the project is carrying out engineering recruitment and project design, improving the process flow chart, and implementing the drawing of itemized system diagrams such as public works. The preparatory design work of the third phase project is about to begin. We expect the phase IV project to be put into operation by the end of 2022. According to the company’s announcement, after the completion of the phase IV project, it will bring an annual income of 3 billion yuan, with a total return on investment of 23.8% and an internal rate of return (after income tax) of 19.0%.
Profit forecast: Based on the gradual production capacity release of the company’s Youjia phase IV Project and the expected maintenance of the price boom of the company’s main products, we raised the predicted value of net profit attributable to parent company in 2022 and 2023 to RMB 1.969 billion and RMB 2.113 billion (original predicted value of RMB 1.696 billion and RMB 1.977 billion), increased the predicted value of net profit attributable to parent company in 2024 to RMB 2.474 billion, and EPS in 20222024 to RMB 6.35, RMB 6.82 and RMB 7.98 respectively, maintaining the “buy” rating.
Risk warning: the construction and release of production capacity are not up to expectations, the raw materials or Shenzhen Agricultural Products Group Co.Ltd(000061) prices fluctuate sharply, and the epidemic situation repeats or even expands.
