Events:
The company issued an announcement of pre-increase in performance for the first half of 2022, which is expected to achieve a net profit of 1.95-200 million yuan, an increase of 229% to 237% over the same period last year, and a deduction of 2.09-214 million yuan for non-return net profit, an increase of 284% to 293% over the same period last year. In the second quarter alone, the net profit of returning to the mother was 1.19-124 million yuan, an increase of 205% over the same period last year, and the net profit of deducting non-return was 1.39-144 million yuan, an increase of 324% over the same period last year.
The results in the second quarter greatly exceeded market expectations.
Comments:
The demand for superimposed herbicides is booming, and the performance is eye-catching. The price of pesticide varieties fell in the second quarter compared with the same period last year, but still improved as a whole compared with the same period last year. According to Zhongnong Lihua, the average prices of enoxone, isoxazone and enoylmorpholine in the second quarter were 15.62,8.59 and 9.02 million yuan / ton respectively, up 44.04%, 11.92% and-15.20% respectively over the same period last year. With Liaoning reaching the first phase of 3000 tons of enoxone, 2000 tons of enoylmorpholine, the second phase of 5000 tons of enoxone production capacity have been released, the performance exceeded expectations.
The advantage of large tonnage products is supported by the performance, and the original research innovation is expected to improve the valuation. In addition to increasing the production capacity of superior varieties such as enoxone and enoylmorpholine, the company has also planned three, four and five phases of raw drugs and intermediates; the layout of preparations is also advancing at the same time, and the 5000-ton high-end comprehensive intelligent fungicide workshop project is expected to start trial production in June. Compared with other pesticide companies in the industry, the company has an obvious advantage in the positioning of the original research company. In the field of selective herbicides, the patented compound quinolone has been put on the market in 2021, and the registration of two innovative compounds, prazolaquine axetil and phenylpropanone, has been steadily progressing; in terms of sterilizing herbicides, the company will develop alternative product solutions based on existing compounds and launch cost-effective products for the sterilization market. With the help of strong R & D capabilities superior to their peers, the company's valuation is expected to increase.
Coverage for the first time, giving a "overweight" rating. The company's second-quarter results exceeded expectations, optimistic about the continued performance growth brought about by the release of production capacity, as well as the growth attributes brought about by the launch of the original research products. For the first time, it is estimated that the operating income will be 23.40,25.16 and 2.865 billion yuan from 2022 to 2024, and the net profit will be 3.88,5.17 and 618 million yuan respectively, corresponding to the PE of 9X/7X/6X, which will be rated as "holding increase".
Risk hint: the price of the product is falling, and the production capacity is not as expected.