Yangnong Chemical (600486) 2019 First Quarterly Report Review: Performance Exceeds Expectations, Rudong’s Long-Term Development

Yangnong Chemical (600486) 2019 First Quarterly Report Review: Performance Exceeds Expectations, Rudong’s Long-Term Development

The core point of view is that the company has entered the gold growth stage, and its profit is expected to increase at the same time. Maintain the company’s EPS forecast for 2019/20/21 to 3.

46/3.

69/4.

24 yuan, maintain a target price of 75 yuan (corresponding to 22 times PE in 2019), and continue to “Buy” rating.

In the first quarter of 2019, the report exceeded expectations, and the net profit attributed to mothers increased by 19 in ten years.

43%.

The company achieved operating income of 15 in the first quarter of 2019.

700 million, down 2 every year.

5%; net profit attributable to mother 3.

27 ppm, an increase of 19 per year.

43%.

The quarter-on-quarter drop in herbicide dose price should be an important reason for the unsatisfactory fourth quarter performance.

However, on the whole, the new product dicamba and the stable consolidation of pyrethrin accompanied the company’s revenue growth. The company’s performance has been consolidated on the 400-500 million platform, and it has taken another step.The ability is continuously verified, and the development of new projects in the future will enter the golden development period.

Pyrethroid donors are expected to continue to grow in average price.

In the first quarter of 2019, pesticide sales were 4,112 tons, an increase of 16% from 3,545 tons in the first quarter of 2018. This quarter’s sales reached a new high in recent years.

From the average price of products, the quarterly price from 2018 to the first quarter of 2019 was 21.

14/20.

13/20.

50/23.

39/24.

760,000 / ton, the average price in the latest quarter has increased by more than 17%, compared with the fourth quarter of 2018, there is still an increase (increased by 5).

8%).

Judging from the current supply and demand pattern and the current severe environmental protection expectations in China, it is expected that the 深圳桑拿网 high price will be maintained and a new wave of growth will be ushered in the next three to four quarters.

Herbicide sales have been affected and prices have rebounded.

In the first quarter of 2019, sales of herbicides reached 10,584 tons, a significant decrease (down 43%) from 18,417 tons in the first quarter of 2018.

In terms of product prices, the quarterly prices from 2018 to the first quarter of 2019 were 3.

87/4.

20/4.

63/2.

54/2.

The price in the latest quarter dropped by 23% year-on-year and rebounded month-on-month (up 17%).

The proportion of dicamba sales decreased; the price of dicamba continued to decrease slightly.

Although dicamba may be less affected than expected by the overseas market in the second half of the year, in the long run, the promotion of Monsanto’s new seeds and dicamba mixtures is a general trend, and orders may increase, but the future potential remains bright.

Layout of multi-product capacity, optimistic about the company’s long-term growth capabilities.

The company has disclosed a number of investment plans including self-construction and acquisition, including: 1) Announced investment on October 13, 20184.

USD 300 million to construct a project of 3,800 tons / year of bifenthrin, 1,000 tons / year of flufenamid, 120 tons / year of santhrin and 200 tons / year of hydroxyphenyl pesticides; 2) Investment announced on April 24, 20182 billion construction of 32,600 tons / year pesticide preparation project; 3) announced on April 14, 2017 investment and construction of 11,475 tons / year pesticide, 1,000 tons / year herbicide and 3,000 tons / year fungicide project; 4) 20188月 月陆续公布拟议收购南通宝叶化工,中化作物及农研公司。
The multi-product capacity layout promotes the company to accelerate the implementation of the coastal development strategy, adjust the production layout, gradually realize product serialization and high-end, and cultivate long-term performance growth points of the company.

According to the data disclosed in the annual report, the three-phase project and the preparation project have already spent 12.71 million yuan and 2.46 million yuan respectively. Once the project is officially started, it is likely that the investment and construction experience of Yangnong will be completed in half a year to the third quarter in advanceSuccess, is expected to contribute quickly to the company’s performance. Risk factors: 1) The release of dicamba is less than expected; 2) The price of pyrethroid drops; 3) The production capacity is not expected.

Maintain “Buy” rating.

As a domestic pesticide leader, the company’s main products are herbicides and insecticides, which are well-positioned under the new environment of high pressure and environmental protection.May usher in a new round of growth in the next three to four quarters.

It is optimistic that the company has entered the gold growth stage, and its profit is expected to increase at the same time.

Maintain the company’s EPS forecast for 2019/20/21 to 3.

46/3.

69/4.

24 yuan, maintain target price of 75 yuan, continue to “Buy” rating.