\u3000\u3 Shengda Resources Co.Ltd(000603) 639 Hailir Pesticides And Chemicals Group Co.Ltd(603639) )
The performance continued to grow, and a high proportion of cash dividends returned to shareholders. In 2021, the company realized an operating revenue of 3.699 billion yuan, a year-on-year increase of + 14.62%; The net profit attributable to the parent company was 450 million yuan, a year-on-year increase of + 10.59%. Among them, 21q4 achieved an operating revenue of 1.116 billion yuan in a single quarter, a month on month increase of + 78.81%; The net profit attributable to the parent company was 139 million yuan, a month on month increase of + 67.82%. 22q1 achieved an operating revenue of 1.2 billion yuan in a single quarter, a year-on-year increase of + 6.57%; The net profit attributable to the parent company was 143 million yuan, a year-on-year increase of + 8.94%. The company plans to distribute a cash dividend of 10 yuan (including tax) to all shareholders for every 10 shares, with a total cash dividend of 340 million and a dividend ratio of 75.75%.
The improvement of pesticide sales in 21 years led to the growth of performance. The company sold 46400 tons of pesticide products in 2021, a year-on-year increase of 14.64%. In terms of technical drugs, the company began trial production of thiamethoxam and thiabendazole in June and September 2020 respectively. These two technical drugs have driven the growth of the company’s pesticide sales in 21 years. In terms of preparations, the sales volume of the company’s preparations also increased rapidly with the completion of the transformation and upgrading project of the 10000 ton agricultural chemical preparation automation production line, the 7000 ton aqueous preparation project and the 23000 ton agricultural chemical preparation and fertilizer project of the subsidiary Otis.
The development of technical drugs has entered the fast lane, and hengning project leads the growth of the company. Qingdao hengning phase I project, which began construction in July 2020, is expected to be completed in the first half of 2022. Hengning phase II project was also officially approved by the board of directors on April 27, 2021 and officially started. In addition, the company plans to invest 300 million yuan to build 3000 tons of propyl thiazole technical drug and other technical drug products and by-products, superimposing the 8000 tons of propyl thiazole production capacity planned by hengning phase II. It is expected that the production capacity of propyl thiazole will reach 13000 tons in the future, and propyl thiazole will become one of the core products of the company.
Risk warning: the price of pesticide products has decreased; The sales volume of pesticide products did not meet expectations; The production progress of the new plant did not meet expectations.
Investment suggestion: due to the rise of the cost side, we lowered the profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 643 / 833 / 1027 million (the original value in 22 / 23 is RMB 696 / 952 million), diluted EPS = RMB 1.89/2.45/3.02, corresponding to PE of 11x / 8x / 7X, maintaining the “buy” rating.
