Event: the company released its 2016 annual report. In 2016, the company realized operating income of 3.463 billion yuan, an increase of 20.96% over the same period last year, and net profit of 318 million yuan, an increase of 32.50% over the same period last year. The net profit of non-return to the mother was 290 million yuan, an increase of 60.06% over the same period last year, and basic earnings per share was 0.09 yuan per share, an increase of 28.57%. The company plans to increase 10 shares for every 10 shares, send 2 bonus shares (including tax) and distribute cash bonus of 0.1 yuan (including tax) to all shareholders.
At the same time, the company released its quarterly report for 2017. In the first quarter, the company realized operating income of 928 million yuan, an increase of 38.84% over the same period last year, and a net profit of 172 million yuan, an increase of 220.81% over the same period last year. The net profit of non-return was 159 million yuan, an increase of 240.47% over the same period last year, and basic earnings per share was 0.04 yuan per share, an increase of 100.00% over the same period last year.
Comments:
The performance rebounded sharply and the gross profit margin increased significantly. In 2016, the company achieved an operating income of 3.463 billion yuan, an increase of 20.96% over the same period last year, and a net profit of 318 million yuan, an increase of 32.50% over the same period last year. The net profit after deducting non-return was 290 million yuan, an increase of 60.06% over the same period last year. The prices of sodium carbonate, ammonium chloride, glass, diglyphosate and glyphosate products put into production in that year all increased to varying degrees. In 2016, the company achieved a gross sales margin of 23.87%, up 1.94 percentage points from the same period last year. Affected by the rise in the prices of major products, the company reported an operating income of 928 million in the first quarter of 2017, an increase of 38.34 percent over the same period last year, a net profit of 172 million yuan belonging to shareholders of listed companies, an increase of 220.81 percent over the same period last year, and a gross profit margin of 32.41 percent, a sharp increase of 9.25 percent over the same period last year.
The profitability of various businesses has improved, and the pesticide business has made a breakthrough. The company's current business includes 1.1 million tons of soda, 135000 tons of double glyphosate, 465000 tons of smart glass, 2.1 million tons of salt brine and 50,000 tons of glyphosate. In 2016, the company's products Lian alkali, glass, double glyphosate, glyphosate are in the economic recovery cycle, profits have improved. Among them, Lianalkali business achieved operating income of 1.429 billion yuan, an increase of 11.84% over the same period last year, sales gross profit margin of 16.00%, up 0.45% year-on-year, double glyphosate business realized operating income of 1.281 billion yuan, sales gross profit margin of 21.71%, down 8.87%. The glass business achieved an operating income of 689 million yuan and a gross profit margin of 20.06%, an increase of 4.85% over the same period last year. The Israeli STK biological pesticide TIMOREX GOLD (Tian Mengjin) obtained pesticide registration in China in November 2016 and was put on the Chinese market in February 2017. two kinds of biological veterinary drugs for fish such as aquaculture and aquaculture have been developed and put on the South American market, and registration experiments have been actively carried out around the world. In 2016, the company's pesticide sector achieved operating income of 393 million yuan, an increase of 318.24% over the same period last year, and a gross profit margin of 31.05%, an increase of 2.70% over the same period last year. In addition, the company's 50,000 tons / year glyphosate project was put into production in July, with an operating income of 278 million yuan and a gross profit margin of 3.19%.
The construction of the new project is smooth and firmly optimistic about the direction of the company's transformation. Strong execution is the main source of the company's core competitiveness, which makes the company have a complete ability to introduce, digest, absorb and successfully operate new projects. Diglyphosate is a good case. Through reform, innovation, structural adjustment and core business transformation, the company's main business has shifted to biological pesticides and other future biological products, Internet +, high value-added fine chemicals, intelligence, environmental protection, new materials and other high-end products, has formed a platform, technology transformation, international company development model. At present, the company's 50,000 t / a methionine project is under construction, and after the project is put into production, it will effectively fill the domestic supply gap; the high-performance carbon fiber project has been approved and issued successfully.
Profit forecast, valuation and investment rating: according to the company's equity after transfer, we estimate that the company's operating income in 2017-2019 will reach 4.788 billion yuan, 5.661 billion yuan and 6.141 billion yuan respectively, and the net profit attributed to the parent company will be 718 million yuan, 807 million yuan and 928 million yuan respectively, and the EPS in 2017-2019 will reach 0.08,0.09 yuan and 0.11 yuan respectively. The dynamic PE corresponding to the closing price of 4.85 yuan per share on May 08, 2017 is 60 times, 53 times and 46 times respectively, maintaining the "buy" rating.
Risk factors: the price of double glyphosate and glyphosate declined; the price of natural gas rose faster than expected; the progress of methionine project was not as expected; the progress of e-commerce project was not smooth.