\u3000\u30 Shenzhen Fountain Corporation(000005) 53 Adama Ltd(000553) )
Event: Andorra released the first quarterly report of 2022, realizing an operating revenue of 9.016 billion yuan, a year-on-year increase of 25.45%; The operating profit was 443 million yuan, a year-on-year increase of 157.22%; The net profit attributable to shareholders of listed companies was 428 million yuan, a year-on-year increase of 187.43%, and the net profit after deducting non recurring profits and losses was 413 million yuan, a year-on-year increase of 239.7%. Based on the total share capital of 2.33 billion shares, the diluted earnings per share was 0.18 yuan and the operating cash flow per share was -0.78 yuan.
The rise in both volume and price promoted the strong growth of revenue scale, and the sales scale in China increased rapidly
In the first quarter of 2022, the sales volume and price of the company's products increased by 14% and 18% year-on-year respectively, driving the sales volume to reach US $1.42 billion, with a year-on-year increase of 28% in US dollars, innovating the historical record of sales in a single quarter and achieving a strong start in 2022.
In terms of regions, Europe / Latin America / North America / Asia Pacific / India, the Middle East and Africa respectively increased yoy + 3.6% / + 32.5% / + 50.4% / + 60.8% / - 0.5% year-on-year in US dollars, of which China's sales increased significantly by 90.6% year-on-year to US $237 million in US dollars. Except that the Middle East and Africa are less under the pressure of crop diseases and insect pests due to weather reasons and the impact of the depreciation of Turkish Lira against the US dollar, the sales decreased slightly year-on-year, and the sales in other regions increased significantly year-on-year. The rapid growth of sales in China is due to the strong demand in the downstream market of fine chemicals, the growth of brand preparations in plant protection business and the acquisition of Huifeng Biology (renamed Shanghai Dubai); The market demand of consumers and professional solutions in North America is strong, and the sales scale of corn, soybean, grain and rice in the U.S. plant protection market has increased significantly; Latin America benefited from good planting conditions, and the sales of differentiated products such as fungicides and herbicides increased in Brazil; France, Romania and Poland in Europe performed well, offsetting and exceeding the decrease in sales in Ukraine.
The profit level has increased year-on-year, and the relocation of Jingzhou base has been completed
The increase in volume and price jointly driven the improvement of the company's profitability, offset the increase in logistics, procurement and production costs and the negative impact of exchange rate changes, and achieved a year-on-year increase in comprehensive gross profit of 29% to US $414 million, and an increase in gross profit margin of 0.2pcts to 29.2% (in US dollars). In terms of expenses during the period, the rate of sales, management and R & D expenses of the company was 15.6%, a year-on-year decrease of 7.0 PCTs; Financial expenses and gains and losses from changes in fair value totaled 336 million yuan, an increase of 98 million yuan year-on-year, mainly due to the rise of Israeli CPI and the appreciation of the shekel. At the same time, the relocation of Jingzhou base of the company has been completed. At present, the production capacity has been basically restored. The adjustment cost accrued in the early stage decreased significantly in the first quarter, which has a positive impact on the gross profit, and the accrual of this part of the cost will be stopped in the future. In addition, based on the current conflict between Russia and Ukraine, the company accrued a total of 126 million yuan of credit impairment and asset impairment losses for accounts receivable in Ukraine.
Profit forecast: the company is a leader in the global non patented crop protection market. Considering the construction of new bases and the future production capacity, we raised the expected net profit of the company from 2022 to 2024 to RMB 1.01/11.8/1.35 billion (the previous value was RMB 550 7.0 850 million), and maintained the "held" investment rating.
Risk tips: the pesticide boom is down, the product price is down, the price of raw materials fluctuates sharply, and the progress and profitability of new projects are lower than expected
