\u3000\u3000 Anhui Guangxin Agrochemical Co.Ltd(603599) (603599)
Event: the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be RMB 1.45 billion ~ 1.51 billion in 2021, a year-on-year increase of + 146.29% ~ + 156.48%. In the single quarter of 2021q4, the net profit attributable to the parent company is expected to be 417 million ~ 477 million yuan, with a year-on-year increase of + 172.1% ~ + 211.3% and a month on month increase of + 3.6% ~ + 18.5%.
The performance of 2021q4 reached a record high in a single quarter: the prosperity of the industry increased in 2021, the prices of main products rose sharply year-on-year, and the profitability increased significantly year-on-year. According to Sino-Agri Leading Biosciences Co.Ltd(603970) , the average price of carbendazim, thiophanate methyl, diuron and Glyphosate in 2021 was + 17.2%, + 21.7%, + 12.3%, + 125.9% higher than that in 2020, and that in 2021q4 was + 20.4%, + 17.7%, + 43.3%, + 51.3% higher than that in Q3; The average price of o-nitrochlorobenzene and p-nitrochlorobenzene changed by + 275.4% and + 92.4% year-on-year in 2021. In January 2022, the prices of the company's main varieties remained high and stable compared with the end of 2021q4. Q1 is the peak season for pesticide export, and the boom is expected to remain high. By the end of the third quarter of 2021, the cash on hand of the company had exceeded 5 billion yuan, with abundant cash flow. The equity incentive target of the company in 2020 is that the net profit from 2020 to 2022 will reach 556 million, 637 million and 758 million yuan, and the target has been exceeded in 2021.
The construction of multiple projects continues to be promoted, and many new environmental impact assessments will help the sustainable growth in the future: according to the announcement, in 2021, the company will actively promote production, fully implement the progress of relevant projects, continuously improve the industrial chain layout, meet the personalized needs of customers at home and abroad, and actively expand the upstream and downstream markets. According to the 2021 interim report, the 200000 ton o (P) nitrochlorobenzene project has been basically completed, and the 300000 ton ion-exchange membrane caustic soda project has entered the end. The technical transformation project of heat supply center, pyrazoxystrobin, oxazolidone and other projects are under construction and are expected to be completed and put into operation in succession. By the end of 2021q3, the company's projects under construction were 673 million yuan, an increase of 316 million yuan over the end of 2020. According to the websites of Guangde city and Dongzhi County Government, the company plans to build projects such as indazocarb, oxadiazinone, cyclozinone, thiazinone and p-aminophenol. There are many intermediate reserves, the new original drug production line is opened smoothly, and the new production capacity layout will become a continuous profit growth point of the company.
Investment suggestion: it is estimated that the net profit of the company from 2021 to 2023 will be RMB 1.47 billion, RMB 1.54 billion and RMB 1.67 billion respectively, corresponding to PE 1.11 billion 2. 10.7 and 9.9 times, maintaining the Buy-A rating.
Risk tips: the project progress is less than expected, and the price of raw materials fluctuates, etc.
