What happened: the company released its third quarterly report for 2022. In the first three quarters of 2022, the company achieved revenue of 2.47 billion yuan, an increase of 63.54% over the same period last year, a net profit of 325 million yuan, an increase of 287.67% over the same period last year, and a net profit of 379 million yuan, an increase of 400.34%. Of this total, 2022Q3 achieved a revenue of 806 million yuan, an increase of 70.55 percent over the same period last year, a decrease of 26.87 percent, and a net profit of 127 million yuan, an increase of 417.94 percent and 4.00 percent, respectively.
Comments:
New production capacity continues to expand, and the performance of 2022Q3 is in line with expectations. Benefiting from the continuous expansion of new production capacity, the price of superimposed pesticides is still at an all-time high, and 2022Q3's performance has increased compared with the same period last year. In terms of herbicides, sales prices rose sharply in the first three quarters of 2022 compared with the same period last year, but Q3 declined year-on-year. The prices of 2022Q3 cigar and herbicide tobacco still increased month-on-month, increasing by 1.3% and 2.4% respectively, while the price of dioxin increased by 4.8% and 13.3% respectively. In terms of sales volume, benefiting from the commissioning of Liaoning Xianda Phase I and Phase II crude drug projects, the sales volume of Q3 alkenone reached 1815.1 tons in 2022, a year-on-year increase of 40.4%. In addition, sales of dioxins also increased, reaching 413.4 tons, an increase of 14.4 percent over the same period last year. In 2022, the total revenue of Q3 alkenone, imidacloprid, methamphetamine and dioxin series products changed by + 40.4%, 45.8%, 30.9%, 14.4%, respectively, compared with the same period last year. In terms of fungicides, although the average selling price of 2022Q3 enylmorpholine has declined, its sales have increased to 511.6 tons, up 21.4% from the same period last year, and its revenue is up 5.1% from the same period last year, thanks to the improvement in the utilization rate of new capacity.
The distribution of pesticide production capacity of the company continues to expand, innovation continues, and overseas registration is progressing smoothly. The company continues to improve the industrial layout, Liaoning first reached the third phase of 1500 tons of crude drugs, 3500 tons of pesticide intermediates project is progressing smoothly, is expected to carry out trial production within 2022; the planned phase 4, phase 5 and other crude drugs and intermediates projects are progressing steadily.
In addition, the annual output of "5000 tons of high-end comprehensive intelligent preparation workshop" project will increase the company's market share of fungicides. At the same time, the company continues to promote the research and development and optimization of new products and processes, and the R & D expenditure in the first three quarters of 2022 was as high as 110 million yuan, an increase of 44.8 percent over the same period last year. The company has carried on the brand-new analysis and improvement to the Imidazolinone series products, and has completed the imidazole ethyl nicotinic acid design work, and entered the construction stage. In addition, the company continues to expand overseas market space, the company has launched registration in the European Union, Australia, North America, Latin America and many other overseas markets, and is expected to be certified and sold in some markets next year.
Earnings forecasts, valuations and ratings: 2022Q3 performed well thanks to the continued expansion of new capacity.
Considering that the prices of related products are still relatively high and the subsequent gradual landing and expansion of new production capacity, we raise the company's profit forecast for 22-24. It is estimated that the company's return net profit for 22-24 is 4.40 (14.5%) / 5.77 (15.2%) / 6.64 (10.6%) respectively, still maintaining the "buy" rating.
Risk tips: product and raw material price fluctuations, capacity construction is not as expected, downstream demand is not as expected.