Main points of investment
Event: Lianhua Technology issued an annual performance advance announcement for 2022. During the reporting period, the net profit attributed to shareholders of listed companies was 690 million yuan to 780 million yuan, an increase of 118.77% to 147.30% over the same period last year. The net profit after deducting non-recurring profits and losses was 500 million yuan to 600 million yuan, an increase of 73.52% 108.23% over the same period last year. Among them, in 2022, Q4 realized a net profit of 347 million yuan to 437 million yuan belonging to shareholders of listed companies, an increase of 813% over the same period last year, an increase of 813% over the same period last year, and an increase of 151% over the previous month. 217%. In 2022, Q4 realized the deduction of non-recurrent net profit of 116 million yuan to 216 million yuan belonging to shareholders of listed companies, an increase of 183%, 427% and-33%, 26%, respectively, compared with the same period last year.
Maintain the investment rating of "prudent overweight". In 2022, the global agrochemical boom has improved, and the company's plant protection business orders have increased. At the same time, the company continues to make efforts to obtain new customers and orders in the pharmaceutical sector. At the same time, the company's business interruption insurance indemnity was included in the company's non-recurrent profit and loss of 238.5 million yuan, and the company's return net profit increased significantly.
Lianhua Technology has a first-mover advantage in the field of fine chemicals, the company started with plant protection products, and currently relies on technological leadership to enter the pharmaceutical CDMO industry and functional chemicals industry. The company's business model is mainly customized processing, products can maintain a stable profit. In the plant protection business sector, with the construction of the new workshop of Jiangsu Lianhua, a subsidiary of the agrochemical base, the company's ability to take orders has been enhanced, and the company's plant protection business is expected to continue to grow. In the pharmaceutical business sector, the company steadily promotes the verification of new pharmaceutical projects. In the first half of 2022, the company has completed or is implementing a total of 9 verification projects, and the follow-up projects will provide the company with room for performance growth. Functional chemicals business section, the company actively distributes new energy chemicals, and there are 2 new energy products to be commercialized in the pipeline. In terms of capacity increment, Lianhua Texas and Lianhua Taizhou have new production lines under construction, plant protection products under construction capacity of 5050 tons, APIs and intermediates under construction, which will help the company to increase production and sales in the future. We raised the company's EPS forecast for 2022-2024 to 0.76,0.77 and 0.96 yuan respectively, maintaining a "prudent overweight" rating.
Risk hint: the risk of raw material price fluctuation, the risk that the production of new projects is not as expected, and the risk that customer expansion is not as expected.
