\u3000\u3 Shengda Resources Co.Ltd(000603) 599 Anhui Guangxin Agrochemical Co.Ltd(603599) )
Performance review
On April 27, the company released its 2021 annual report and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 5.55 billion yuan, a year-on-year increase of + 63.12%, and the net profit attributable to the parent company was 1.48 billion yuan, a year-on-year increase of + 151.28%. In the first quarter of 2022, the company realized an operating revenue of RMB 2.057 billion, a year-on-year increase of + 64.39%, and a net profit attributable to the parent company of RMB 569 million, a year-on-year increase of + 101.9%.
Business analysis
The prices of thiophanate methyl, carbendazim and diuron are generally stable, and glyphosate and ortho-p-nitrate are in a business cycle. In terms of the price of subdivided products, the current quotation of thiophanate methyl, the main product of bactericide, is 47000 yuan / ton (white), and carbendazim is 47000 yuan / ton (white); The main herbicide product diuron is 45000 yuan / ton, and the prices of the three traditional products of the company remain basically stable. The current quotation of glyphosate is 65000 yuan / ton, down from 80000 yuan / ton in the fourth quarter of 21, but it is still in the business cycle. The company’s Glyphosate follows the market and can fully enjoy the profit thickening brought by the upward price. In terms of fine chemicals, the company offers 17000 yuan / ton for nitrochlorobenzene and 10300 yuan / ton for o-nitrochlorobenzene. The current price remains stable as a whole.
Acquire Shixing pharmaceutical, further consolidate the pattern of o-p-nitrate and extend p-aminophenol to the downstream. On March 18, the company announced that it plans to use 210 million yuan in cash to take 70% equity of Liaoning Shixing Pharmaceutical Chemical Co., Ltd., which owns 70000 tons of ortho-p-nitrate and 18000 tons of p-aminophenol. In terms of adjacent to nitrate, at present, the company has a production capacity of 200000 tons after the phase 2100000 ton project is put into operation, plus 70000 tons of world star pharmaceutical, a total production capacity of 270000 tons, and the market share is further improved. In addition, the company announced that it plans to invest 490 million yuan for the “project with an annual output of 40000 tons of p-aminophenol” to open up the downstream industrial chain of p-nitrochlorobenzene.
Investment advice
In 2021, the prices of some products of the company were at a high level. We believe that there will be some sustainability in 2022. In 2023, the company will benefit from the further growth brought by the launch of new projects. We expect the net profit attributable to the parent company from 2022 to 2024 to be 1.893 billion yuan (+ 23.8%), 2.194 billion yuan (+ 30.7%) and 2.35 billion yuan (newly introduced) respectively; EPS is 4.08 yuan, 4.72 yuan and 5.06 yuan respectively. The current market value corresponding to PE is 8.34x/7.19x/6.72x, maintaining the “buy” rating.
Risk tips
The construction progress of the project is less than expected; The price of pesticide products fell; Demand for pesticides fell.
