\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Conclusions and suggestions:
Event: the company released the first quarterly report of 22 years. In Q1 of 22 years, the company achieved a revenue of 5.268 billion yuan, yoy + 42.08%, and the net profit attributable to the parent company was 904 million yuan, yoy + 103.51%, which was in line with the expectation.
The company is a leading enterprise of pyrethrin in China. Affected by the international situation and epidemic situation this year, grain prices rose, driving the rise of pesticide prices. The expansion of Youjia phase IV of the company coincides with the time, with strong certainty of performance growth and large follow-up growth space, maintaining the “buy” rating.
The volume and price of products increased simultaneously and the performance increased significantly: the first half of the year was the peak season of pesticides, and the company’s revenue and performance increased significantly, mainly benefiting from the simultaneous rise of volume and price of products. In the year of 22, the company’s Youjia phase III project reached full production capacity, the first phase of phase IV project was completed and put into operation, and the production capacity and output increased compared with the same period of last year. In addition, due to the impact of the conflict between Russia and Ukraine, the global food price rose, and the price of pesticides, the company’s main product, rose compared with the same period of last year. In the year of 22, the average ex factory price of Q1 company’s original medicine reached 112100 yuan / ton, yoy + 41.26%, and the average ex factory price of preparations reached 55500 yuan / ton, yoy + 77.21%. At present, the international situation is still, Pesticides are expected to usher in a business cycle.
The profit is thickened and the cost is well controlled: the product volume and price rise together to improve the company’s gross profit margin. In 2012, the gross profit margin of Q1 company increased by 6.29pct to 29.77%. In terms of expenses, the company increased its R & D investment, with a year-on-year increase of 0.22pct to 2.33%, a year-on-year increase of 0.17pct to 1.65%, a year-on-year decrease of 0.44pct to 3.56%, and a year-on-year increase of 22 million yuan in financial expenses due to exchange rate fluctuations.
The newly-built capacity is gradually released and the growth momentum is sufficient: some projects of Youjia phase IV are put into operation to help the company grow. In December 2021, the projects with an annual output of 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 were completed, and the production capacity of Q1 in 22 years was gradually released, bringing growth to the company. The construction and operation of the remaining projects in Youjia phase IV will further improve the performance of the company. In addition, in July 2021, Syngenta, an international agrochemical leader, obtained the controlling stake of the company. Subsequently, relying on Syngenta’s international platform, the company’s overseas business will be further guaranteed.
Profit forecast: considering the impact of the epidemic, we revised the profit forecast. It is expected to achieve a net profit of RMB 1.581/1.694 billion in 2022 / 2023, yoy + 29% / + 7%, equivalent to EPS of RMB 5.10/5.47. At present, the PE corresponding to the share price of A-Shares is 22 / 21 times, maintaining the “buy” rating.
Risk tips: 1. The product price is lower than expected; 2. The production of new projects is not as expected.
