The company released its report for the third quarter of 2022. It achieved operating revenue of 7.100 billion yuan in the first three quarters, an increase of 48.12% over the previous year, achieved net profit of 1,689 billion yuan, an increase of 221.86% over the previous year, and achieved net profit of 1,736 billion yuan after deducting non-return mother's net profit of 1,736 billion yuan, an increase of 238.78% over the previous year. Among them, the third quarter alone achieved operating income of 1,869 million yuan, an increase of 13.97% over the previous year, and achieved net profit of 476 million yuan, an increase of 118.61% over the previous year, and net profit of 500 million yuan after deducting non-return mother's net profit was 500 million yuan, an increase of 133.39% over the previous year.
The resilience of off-season performance was outstanding, and years of intensive work were exhausted. Affected by the off-season in the third quarter, pesticide prices generally fell from high levels. According to Zhongnong Lihua, the average prices of glyphosate, acetoxetamine, butyrate, and isopromethoxamine in the third quarter were 6.22, 4.09, 3.30, and 56,200 yuan/ton respectively, up 18.74%, 17.86%, 44.17%, and 74.64%, respectively, down 4.09%, 20.56%, 10.14%, and -2.10% from the previous month; the average price of antagonist in pesticides was 33,000 yuan/ton, up 30.59% year on year, the same as last month. In the off-season, the company shipped 22,800 tons of herbicides, up 11.94% year on year, fully reflecting the central increase in pesticide demand. At the same time, the company's profit resilience began to be highlighted. The gross profit margin for the third quarter was 33.79%, down only 0.59 pct from the previous quarter, and the net interest rate was 24.73%, up 1.84 pct from the previous quarter. At present, flame retardant projects and formulation production capacity continue to climb. Combined with the peak pesticide export season, the company is expected to maintain a strong production and sales boom, and enjoy a long and snowy performance.
The growth map is expanding at an accelerated pace, and it is currently one of the few pesticide companies with clear expansion. With the landing of the second base in Zhijiang and the third base in Weng'an, the layout of the three major bases has accelerated. The Nantong main base is expanding the second phase of the flame retardant project, including 50,000 tons of TCPP, 0.5 million tons of BDP, and 25,000 tons of phosphorus oxychloride (the payback period after tax is short, it only takes 1.56 years); the Zhijiang base strategically lays out the creative drug JS-T205; and the Weng An base cooperates with Weng Fu to invest about 22 billion dollars to cultivate the phosphorus and chlorine industry chain on a large scale. 2022 is the beginning of new ventures in Jiangshan, and the depth and breadth of the industrial chain are promising.
Profit forecasts are maintained for the time being, and the “buy” rating is maintained. The third quarter results have shown growth resilience, and the company's profit center level is expected to maintain its leading position in the agrochemical industry. Profit forecasts are maintained for the time being. The company's revenue for 2022-2024 is estimated to be 93.58, 97.71, and 10.614 billion yuan respectively, and net profit of the mother is 1,939, 2,058, and 2,350 million yuan respectively. The corresponding PE is 7X/6X/6X respectively, maintaining the “buy” rating.
Risk warning: falling product prices, production capacity falling short of expectations
