Event
Xin'an Co., Ltd. issued a forecast of Q3 performance in 2021, and the company expects to achieve a net profit of 15.8-1.62 billion yuan in the first three quarters of 2021, an increase of 933-959% over the same period last year and 719-740% compared with the same period last year (after retroactive adjustment). The net profit after deducting non-profit was 15.7-1.61 billion yuan, an increase of 1209-1242% over the same period last year, mainly due to the continuous increase in the prosperity of products such as glyphosate and silicone.
Comments:
The layout of the whole industry chain based on silicon fully benefits the prosperity of the industry. Extending silica and metal silicon upstream, it currently has a production capacity of 100000 tons of metal silicon and 80 million tons of matching silica under construction, and there are still plans to expand production in the future. To develop silicone terminal applications downstream, the company continues to cultivate downstream deep processing subsidiaries Chongyao Science and Technology, Zhejiang Lade and Guangdong Tianyu to obtain higher added value by lengthening the industrial chain.
According to Baichuan Information, the average price of Q3 metal silicon is 256,000yuan / ton (qoq+79.73%,yoy+124.90%), and the average price of East China silicone DMC is 3500000 yuan / ton (qoq+24.34%,yoy+108.88%). At present, the company has completed the layout of the silicon-based industry chain and basically realized the self-supply of metal silicon. Driven by the cost of metal silicon and the prosperity of organosilicon downstream, the company will fully benefit from the increase in product prices.
Glyphosate is expected to continue the New year market, profits are expected to continue to improve. According to Baichuan Information, the price of glyphosate in East China has risen 42.31% to 75,000 yuan / ton compared with the average price of Q3, and continues to rise. On the one hand, the price of raw material yellow phosphorus has risen sharply, pushing up the price of glyphosate from the cost side. On the other hand, the upward shift of the oil price center and the extreme weather in many parts of the world will support the high prosperity of agricultural products, which in turn promotes the overall agrochemical demand to remain strong, and the use of glyphosate per unit area also benefits from the increase in planting income compared with the same period last year. Superimposed with catalysts such as South America to encourage land reclamation, global paraquat ban, wheat grass fear promotion hindered and other catalysts, the margin of glyphosate demand continues to expand. Currently in South America, Australia and other procurement windows, followed by the North American traditional procurement season from November to March of the following year, the industry is currently in low inventory, glyphosate boom is expected to be the New year.
Raise earnings forecasts and maintain "buy" ratings. The prices of the company's main products glyphosate, metal silicon and organosilicon continue to rise, and we raise our profit forecast. It is expected that the company will achieve a net profit of 24.11, 25.60 and 2.789 billion yuan from 2021 to 2023, corresponding to 10X/10X/9X, respectively, and maintain "buy".
Rating. The company's future performance center moved up, metal silicon benefited from the photovoltaic boom, maintaining the target price of 62.01 yuan.
Risk hint: the price of the product falls, and the progress of the project is not as expected.