Event: the company issued a forecast of the results of the three-quarter report in 2021, which is expected to achieve a net profit of 1.58 billion to 1.62 billion yuan in the first three quarters, an increase of 719% to 740% over the same period last year, and a deduction of 1.565 billion to 1.605 billion yuan in non-net profit, an increase of 1209% to 1242% over the same period last year. Among them, the net profit in the third quarter was 740 million to 780 million yuan, an increase of 625%, 665% and 31.2%, respectively, compared with the same period last year.
The volume and price of the main products rose together, which contributed to the substantial growth in performance. During the reporting period, the price and sales volume of the company's glyphosate, silicone, industrial silicon and other products increased significantly compared with the same period last year, the company gave full play to the advantage of the integration of the whole industry chain, took the initiative to optimize the product structure, and actively expanded the upstream and downstream market share. Steadily promote the strategic goal of "becoming a global leader in the field of silicon-based new materials and crop protection solutions". The company actively responds to the operating pressure brought about by the national "double control" policy and the rising prices of raw materials, and the main production units operate stably and efficiently, providing a strong guarantee for the substantial growth of business performance.
Glyphosate scene demeanor upward, rising prices continue to exceed expectations. In the third quarter of 2021, the average market price of glyphosate was 53,000 yuan / ton, up 30% from the previous month. Although the price of raw material yellow phosphorus and glycine increased significantly from the previous month, the price difference of glyphosate still increased by about 4200 yuan / ton, and the profit level increased significantly. At present, the market price of glyphosate in eastern China has risen sharply to 75,000 yuan / ton, and the cost of raw materials is strong. The fourth quarter is the peak export season of the pesticide market. In 2021, there are more orders from producers and little sales pressure. At the same time, under the influence of power cuts, environmental protection and other factors, the starting load of enterprises has decreased, and glyphosate prices are expected to continue to run strongly.
The price of organosilicon has risen sharply, benefiting from the integration of the industrial chain. The average market price of silicone DMC in the third quarter of 2021 was 35,000 yuan / ton, up 24.2% from the previous quarter. The price of raw material industrial silicon rose sharply under the influence of power cuts, with strong cost support. The peak season of silicone demand is gradually approaching, supply and demand is tight, and profits have increased significantly. The current silicone DMC market price has risen sharply to 60,000 yuan / ton. Raw material industrial silicon is in short supply, and silicone prices are expected to remain high. The company has a production capacity of 100,000 tons of industrial silicon per year, and the 100000-ton industrial silicon project under construction is progressing smoothly, and the integration advantage of the industrial chain continues to strengthen. Recently, the market price of silicone downstream raw rubber, 107 rubber and precipitated mixed rubber has risen sharply, and the price transmission of the industry chain is smooth.
Continue to extend to the downstream high-end areas, good growth in the future. The company produces glyphosate and organosilicon at the same time and forms a synergistic effect. Ningxia Xinan ammonium phosphine first phase 3000 tons / year project and supporting diethyl ester project are expected to be trial-produced by the end of 2021. The company continues to promote the terminal development strategy, while greatly increasing the single production capacity, focusing on 5G, UHV, high-speed rail and rail transit, new energy vehicles, medical and health and other industries new track, focusing on silicone terminal application technology development, continue to optimize the product structure, increase the sales proportion of medium and high-end products year by year, steadily promote the terminal strategy, and enhance the attributes of new materials.
Maintain the "highly recommended-A" investment rating. We estimate that the net profit of the company in 2021-2023 is 2.58 billion yuan, 2.07 billion yuan and 2.26 billion yuan, respectively, and the EPS is 3.15,2.53 and 2.76 yuan respectively. The current share price corresponds to 10 times, 12 times and 11 times of PE respectively, maintaining the "highly recommended-A" rating.
Risk tips: product prices fall, raw material prices fluctuate, product volume is lower than expected.