\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 486 Jiangsu Yangnong Chemical Co.Ltd(600486) )
Event: the company released the first quarterly report of 2022, achieving a revenue of 5.268 billion yuan (year-on-year + 42.08%), and a net profit attributable to the parent company of 904 million yuan (year-on-year + 103.51%, month on month + 337.88%).
Q1 performance exceeded expectations, reaching a new high in a single quarter, and the project operation continued to contribute to the increment: the company’s 2022q1 performance increased significantly, mainly due to the full production of Youjia phase III project, the completion and operation of phase IV Project in the first phase, the production capacity and output increased compared with the same period of last year, and the price of main pesticide products increased compared with the same period of last year. The sales volume of technical drugs and preparations of 2022q1 company was 28400 tons and 16900 tons respectively, and the average sales price was 112100 yuan / ton and 55500 yuan / ton respectively (up 41.26% and 77.21% year-on-year). According to Baichuan, the price of Cypermethrin, bifenthrin, glyphosate, dicamba and pyrazoxystrobin 2022q1 of the company’s products changed by 5.0% / 1.3%, 63.3% / 31.8%, 153.2% / 46.9%, 1.0% / 1.6% and 64.9% / 44.4% respectively compared with the average price of 2021. The gross profit margin in 2022q1 was 29.77%, with a year-on-year increase of 6.29 PCT and a month on month increase of 7.37 PCT. The cost advantage based on the complete industrial chain is obvious. The first half of the year is the peak season for pesticide sales. At present, although the price of pesticides is lower than that of 2022q1, it is still higher than that of 2022q1. The company produces more and sells faster and supplements the price by quantity. It is expected that the performance will continue to improve year-on-year.
The construction speed of the project is leading, and the plan of large-scale new projects is expected to open long-term growth space: according to the announcement, the first phase of the company’s Youjia phase IV was completed and commissioned and produced in early 2022. The products in the first phase involve four varieties of Difenoconazole, nitrosulfuron, bifenthrin and haloperidol. The construction speed of the project has kept leading in the industry. The first to fourth phase projects of the subsidiary Youjia company have been completed rapidly, and the commissioning has been successful at one time. According to the official website of Huludao government, the company has signed a letter of intent on strategic cooperation and plans to invest a total of 10 billion yuan to build a large-scale pesticide fine chemical project in Huludao, which is expected to open up space for long-term development.
After Syngenta became the owner, it deepened internal coordination and strengthened the advantages of research, production and marketing integration: according to the announcement, Syngenta group completed the transfer procedures of 36.17% of the shares of the company in 2021 and became the controlling shareholder of the company. The company is expected to enjoy the development dividends brought by Syngenta group’s internal agrochemical coordination. According to the announcement, the company’s overseas trade business increased by 93.4% year-on-year in 2021, and vigorously carried out independent registration to lay the foundation for expanding sales.
Investment suggestion: it is estimated that the net profit of the company from 2022 to 2024 will be 2.08 billion yuan, 2.34 billion yuan and 2.82 billion yuan respectively, corresponding to 18, 16 and 13 times of PE, maintaining the Buy-A rating.
Risk warning: product price fluctuation, demand less than expected, etc.
