Yangnong Chemical (600486): Net profit margin hits record high, optimistic about pesticide boom continues to improve

Event: The company announced a quarterly report, and realized revenue 杭州夜网 of 15 in the reporting period.

7 billion, at least -2.

50%, realizing net profit attributable to mother 3.

2.7 billion, previously +19.

43%.

Comment: The operating data of pesticides and herbicides improved month-on-month, net profit margins hit a record high, which led to better-than-expected performance reports and the company’s pesticides revenue10.

1.8 billion, previously +35.

73%, +61.

08%, sales of 4,112 tons, +15 in ten years.

99%, +52.

24%, with an average sales price of 24.

76 million / ton, +17 for ten years.

12%, +5 from the previous quarter.

82%; Herbicide achieves income3.

1.4 billion, ten years -55.

96%, +54.

68%, sales of 10584 tons, -42 throughout the year.

53%, +31.

76%, average selling price 2.

970,000 / ton, at least -23.

26%, +17.

53%.

Return on net assets 6.

83%杭州桑拿 (+4 MoM).

44 points), gross profit margin 35.

75% (+12.

28pct), net interest rate is 20.

98% (+8.

84pct), the report reports that the prices of pesticides and herbicides have both risen, operating data has improved significantly, and net profit margin levels have reached record highs, driving performance beyond expectations.

The Xiangshui incident led to the restructuring of the pesticide industry. The easing of Sino-US trade and the favorable improvement of the pesticide industry’s export. The most significant impact of the Xiangshui incident was the dyes and pesticides industry. The incident affected the company’s product bifenthrin industry pattern in the short term.Ester prices are expected (currently quoted at 39 million / ton, the company’s 800-ton capacity, planned 3,800 tons); in the long run, there are prospects for rectification in the national chemical parks. Jiangsu and Shandong have successively introduced rectifications for the safety production of chemical parks in the province.In the working paper, the central environmental protection inspector also increased the inspection of chemical companies and parks. The highly polluting pesticide industry is facing a new round of supply-side clearance, highlighting the trend of remodeling, and the company’s leader is more stable; The “Zero Growth Action Plan for Pesticide Use by 2020” was issued in 1949. We believe that the future development direction of the pesticide industry is to continuously expand exports.

As of 2018, the proportion of net pesticide export in developing countries reached 53%, and the company’s export revenue accounted for more than 65%. The United States is an important exporter of the company’s products such as glyphosate and dicamba, which has gradually eased into Sino-US trade relations.And, the export of domestic pesticide industry is expected to be significantly improved.

Optimistic about the improvement of the pesticide boom, the company’s chrysanthemum + dicamba faucet gradually increased and stabilized. It was upgraded to a “buy” rating. The company is the leader in the domestic pesticide industry. The market share of chrysanthemum in domestic is about 70%.Leading position in the world, major projects planned to be invested by the subsidiary company Ujia every year, including 3800 tons / year bifenthrin, 1000 tons / year fluorophenamine, 120 tons / year santhrin and 200 tons / year hydroxyphenylEster pesticides constitute a new growth point.

From a long-term perspective, the continuous rectification of domestic chemical parks is expected to reshape the pesticide industry. The easing and Sino-US trade relations have significantly improved the export situation of the domestic pesticide industry, and the industry’s prosperity has continued to improve. It is expected that the company will achieve net profit in 19/20.

6/13.

500 million, eps3.

74/4.

36, corresponding to PE15.

8/13.6 times, upgrade to “Buy” rating.

Risk warning: raw material prices fluctuate, exchange rate changes, Sino-US trade talks fall short of expectations, and demand falls short of expectations