\u3000\u3000 Shandong Weifang Rainbow Chemical Co.Ltd(301035) (301035)
Core view
Shandong Weifang Rainbow Chemical Co.Ltd(301035) is a rare leading enterprise of non patented pesticide preparations with global layout in China. It has independent preparation product sales capacity overseas, master the high-value links of the global agrochemical industry chain, and has great growth space in the future:
Global leading cost competitiveness: the company's cost competitiveness is reflected in production and channel. On the production side, China's complete and efficient pesticide supply chain gives the company an inherent cost advantage. As the first agricultural chemical export in China, the company also has stronger bargaining power. The cost advantage of the canal end is more prominent. On the one hand, based on its rich and strong product registration certificate reserve, the company allows overseas agrochemical companies to divert themselves by means of registration, opening and authorization. On the other hand, the company conducts business in more than 70 countries and has built efficient decision-making and fine management ability in a complex international environment, with strong know-how. The cost advantage of the canal end endows the company with the characteristics of low gross profit and high net profit and high turnover; There is no need to pursue high gross profit margin, but to increase traffic in an open and cooperative way. Nowadays, with the increasing cost of getting customers in all walks of life and the need to burn money to buy traffic, the company can not only continuously realize the traffic, but also continuously realize the cash.
Scarce overseas registration certificate resources: the company has more than 3000 overseas registration certificates and is continuously increasing. Overseas registration has the difficulties of long cycle and large investment due to differences in national conditions. For example, the registration cycle in Brazil can reach more than 5 years, and the investment in a single category can reach hundreds of thousands of dollars. The high cost of time and money is a strong barrier for enterprises with rich registration certificates. At the same time, the company's high efficiency in registration decision-making makes its own registration reserve rich in categories and strong product power, which can more effectively adapt to the rapidly changing diseases and pests and farmers' demand preferences, promote the continuous operation of its open authorization and light structure mode, and bring brand exposure.
Huge growth space: the global agrochemical terminal preparation market has reached nearly 70 billion US dollars, the company's global market share is less than 2%, and the market share in its most heavily cultivated South American market is less than 4% (crop pesticide caliber, 2019), and its development is far from the bottleneck; In recent years, the CAGR of the company's revenue and net profit attributable to the parent company has reached 20%, which is about 5% higher than the growth rate of the global agrochemical market. In the future, the scale effect of company registration certificate and channel reserve will be reflected, and the structural growth opportunities brought by the reconstruction of the global agrochemical interest chain will be seized, with large growth space and momentum
Profit forecast and investment suggestions
We predict that the earnings per share of Shandong Weifang Rainbow Chemical Co.Ltd(301035) in 21-23 years will be 2.78, 3.43 and 4.21 yuan. According to the price earnings ratio of 26 times of comparable companies in 22 years, the target price of 89.18 yuan and buy rating are given for the first time.
Risk tips
Price fluctuation risk of raw materials and shipping; The progress of obtaining registration certificate and channel development is less than expected; Uncertainty risk of overseas operation.
