What happened: the company released its third quarterly report for 2022. In the first three quarters of 2022, the company achieved revenue of 5.902 billion yuan, an increase of 24.51% over the same period last year, a net profit of 343 million yuan, an increase of 23.43%, and a net profit of 384 million yuan, an increase of 55.47% over the same period last year. Of this total, 2022Q3 achieved a revenue of 2.199 billion yuan, an increase of 27.38% over the same period last year, an increase of 9.43% over the previous year, and a net profit of 138 million yuan, an increase of 56.03% and 5.99% over the same period last year.
Comments:
Benefiting from the sufficient orders for plant protection products of Gaojing Pesticide Co., Ltd., the performance of 22Q3 company is good. Benefiting from the rising global prices of staple agricultural products, which has increased farmers' willingness to plant, and thus spawned the demand for plant protection products, the company's plant protection business has sufficient orders on hand, and the operating rate of Jiangsu Lianhua base since the resumption of production is relatively high. this has led to a big increase in the performance of Q3 company in 2022. At the same time, the company continues to increase investment in R & D. in the first three quarters of 2022, the company's R & D expenditure reached 273 million yuan, an increase of 20.62% over the same period last year, accounting for 4.64% of revenue.
The verification of the new pharmaceutical project is progressing smoothly, and the CDMO business is expected to further accelerate. The production expansion of the pharmaceutical division of the company is progressing smoothly, and the construction of a new workshop has been completed in the first half of 2022, and a certain percentage of capacity growth will be maintained every year. At the same time, the verification of the company's new pharmaceutical projects is progressing steadily. In the first half of 2022, the company has completed or is implementing a total of 9 verification projects, one of which is the API project. In the R & D phase, the number of innovative drug registration intermediates and API is close to 1/2. In the future, with the gradual increase in the number of products in the commercial stage, the company's pharmaceutical CDMO business is expected to further accelerate. In addition, the company has set up a CRO R & D platform, and has completed the docking with important customers, ensuring the sustainability of business growth.
In the field of new energy, functional chemicals are expected to create the third growth curve for the company. The products of the functional Chemicals Division of the company are produced and sold by themselves, the product price is in line with the market, and the product scale is constantly expanding. On the one hand, the business department makes a reasonable reorganization and optimization of production resources in time to ensure a stable supply; on the other hand, it timely adjusts the product sales price and strategy according to the market supply and demand situation to ensure the stable growth of market share. In 2022, the business department actively expanded the field of new energy chemicals and continued to develop new products and processes. At present, there are 2 new energy products to be commercialized in the pipeline, and product verification has been completed in downstream customers, 4 in the pilot stage and 10 in the small-scale stage. In the follow-up, if the products are successfully commercialized and begin to expand, the company is expected to create a third growth curve.
Earnings forecast, valuation and rating: thanks to the increase in sales of plant protection products, the company's Q3 performance increased significantly in 22 years, but the performance in the first three quarters was generally lower than previously expected. In addition, considering that the performance of the company's pharmaceutical and functional chemicals business is later than expected, we downgrade the company's profit forecast for 2022-2024. it is estimated that the company's return net profit from 2022 to 2024 is 4.91 (13.3% down) / 6.43 (down 21.4%) / 8.50 billion (down 20.3%) respectively. We are still optimistic about the follow-up development of the company's plant protection, pharmaceutical and functional chemicals business sectors. Maintain the company's "buy" rating.
Risk tips: product and raw material price fluctuations, capacity construction is not as expected, environmental protection and safety production risk.
