Yangnong Chemical (600486): Sinochem Assets’ High Growth Performance Exceeds Market Expectations Youjia Phase III, Phase IV Steady Advancement and Continuation of Company 杭州夜网 Growth
The company released three quarterly reports for 2019: 1-3Q2019 to achieve operating income of 70.
6.2 billion yuan (YoY + 1.
09%, after adjustment, the same below), to achieve net profit attributable to mother 10.
7 billion (+14 compared to the same period last year).
69%), after deducting non-return to mother’s net profit.
9.4 billion (YoY + 1.
26%), of which revenue in Q3 2019 was 18.
00 ppm (YoY-8.
19%), Q3 returns to net profit of the mother 2.
190,000 yuan (YoY + 0.
55%), the third quarter does not include Sinochem’s assets before the adjustment to the net profit attributable to the parent is estimated to be about 2.
100 million (YoY-6.
Fundamental asset performance is in line with market expectations, and QoQ is actually a QoQ sales decline in the off-season.
Sinochem Crops 杭州桑拿 and Agricultural Research Corporation consolidated net profit and loss for the first three quarters2.
33 trillion, of which Q3 consolidated profit and loss of 14.65 million yuan, the performance slightly exceeded market expectations.
In the third quarter sales, the off-season sales volume turned into an asset, which was a month-on-month decrease. The long-term unit price of pyrethroid remained stable, but the cost of raw materials replaced the company’s gross profit margin.
19Q3 company sales of pesticides 3026 tons (YoY + 18.
14% in the 19th quarter.
11%), the sales volume share was mainly due to the off-season export sales in the third quarter. In terms of price, the company’s chief executive unit price of permethrin. At the beginning of Q3, the company’s main pyrethrin products, kefirthrin, bifenthrin, and cypermethrin prices were 32 and 35.
2 million / ton, the price at the beginning of Q2 was basically stable, so the average price was 21.
300,000 yuan / ton (YoY + 3.
89%, QoQ + 0.
32%), the overall price remained stable compared to the previous quarter, the entire pesticide sector 19Q3 achieved revenue of 6.
4.5 billion (+22 compared to the same period last year).
73% in the 18th quarter.
85%); in the herbicide sector, sales of 7,914 tons in the third quarter (YoY33.
80%), average selling price 2.
580,000 yuan / ton (YoY-44.
05%), both volume and price fell plate revenue 2.
0.4 billion (YoY-62.
51%), mainly because in the third quarter of the herbicide export season, the shrinkage of wheat straw reduced the sales volume and average price of the pesticide sector. According to our estimates, the company ‘s Q3 wheat straw shrinkage sales were around 300-500 tons, and glyphosate sales were aroundAbout 7300-7500 tons; at the end of 18th, the company’s 1,000 tons of pyrazolium corpuscles were put into production and put into production. In addition to the 600 tons of fluoroamine put into operation in the first phase of the company, the company’s fungicide section started to take shape.19Q3 contributed about 25 million net profits; at least the company reported that the main raw materials, caustic soda, diethanolamine, formaldehyde, isoprene, toluene, and methylfuran, each fell by 19 prices.
6%, 18.8%, 11.
9%, so the company’s 19H1 gross profit margin increased to 1pc to 28.
73% (adjusted), the average ROE of formaldehyde in the combined company reported an increase of 0 in half a year.
56 points to 19.
The synergy shows the rapid growth of Sinochem’s agrochemical performance, and the demand in South America is about to start. Dicamba is expected to resume growth.
In the first half of the year, the company actively explored the domestic market, fully exerted the synergy with Sinochem crops, adopted product sales, expanded new products, and established a new transfer warehouse, etc., and achieved good results. Sinochem Agrochemical Assets 2019H1 achieved net profit2.
180,000 yuan, at least 1 in 2018H1.
54 billion percent increased by 41.
6%, an important increase in adjusted performance; the company’s dicamba drug is mainly sold to the American market. Affected by factors such as the adverse external trading environment, dicamba is afraid of exports less than expected. The market is generally worried that dicamba is afraid of downstream demand.Began field trials of geramiphos-resistant soybeans in Brazil and extended them in total (in Brazil, the area of soybeans planted in 2018 was 89.65 million acres).
The market demand for dicamba in South America has exploded. The company currently has a capacity of 25,000 tons of dicamba, which is the global leader in supplying dicamba, and the South American market growth company will fully benefit.
The planned acquisition of the parent company’s technology-based intangible assets will pave the way for the Youjia project. Youjia Youjia Phase III and Phase IV projects have steadily advanced and continued high growth.
The company announced that it intends to acquire the parent company’s products such as anisole, meconazole, fluorourea, and Gaigai. The above products will replace the related products of the company’s Youjia Phase III project.It is laying a good foundation for the construction and commissioning of the company’s third-phase project, replacing the total investment of 20.
The US $ 200 million Youjia Phase III project is steadily advancing construction, and production capacity is expected to be successively launched; until the end of 2018, the company announced the Youjia Phase IV project, including 3800 tons / year bifenthrin, 1,000 tons / year fluorophenolamine, 120 tonsThe total annual investment of sanitary esters and 200 tons / year of hydroxypropyl ester pesticides will be converted.
3 trillion, the project construction period is tentatively set to 2 years, after the project is completed and put into production, the estimated average annual operating income is 10.
2.3 billion, continuing the company’s high growth.
As the only listed pesticide asset in Sinochem, Yangnong constantly makes it a high-quality Sinochem agrochemical asset, and promotes to become the world’s leading pesticide research and development and production enterprise relying on Sinochem’s platform.
Investment suggestion: Maintain “Buy” rating and maintain the company’s profit forecast for 2019-2021. It is expected that the net profit of the mother will be 11-20.
10,000 yuan, EPS 3.
84 yuan, the current market value corresponding to PE is 13X, 11X, 10X.
Risk reminders: 1) The progress of the new project is not up to expectations; 2) Environmental protection is relaxed, and product prices have fallen sharply.