Main points of investment:
The stock buyback is completed and used for equity incentive. As of February 14, 2020, the company had bought back 14.84 million shares through centralized bidding, accounting for 1.62% of the company's total share capital. The highest transaction price was 7.01 yuan per share, the lowest transaction price was 6.58 yuan per share, and the total transaction amount was 100 million yuan (excluding transaction fees).
The repurchase shares will be used in the employee stock ownership plan or equity incentive implemented by the company at a later stage.
Nuopxin: agricultural integrated service provider. The company has constructed a new development pattern of the three modules of "agricultural materials research, production and marketing, agricultural comprehensive services and characteristic crop industry chain", and the enterprise strategy is developing steadily and iteratively. From agricultural material distribution and supply version 1.0 (providing extreme high-end packages and first-class crop solutions), field circle regional integrated agricultural services version 2.0 (covering nearly 400 agricultural counties participating dealers connected into a line, line into a surface), to a single characteristic crop industry chain version 3.0 (building the whole crop industry chain management around core crops). According to the company's performance, KuaiBao, the total revenue in 2019 is expected to be 4.07 billion yuan, an increase of 1.70% over the same period last year, and the attributable net profit is 240 million yuan, down 26.71% from the same period last year, mainly due to a decrease in investment income and an increase in sales expenses over the same period last year. And the increase in the price of crude drugs has led to a decline in the gross profit margin of some products.
The income of farmland circle and table continues to grow. As of 2019Q2, Tian Tian Circle has 54 dealers with a cumulative shareholding ratio of 51%, and a total of 41 holding dealers have been included in the company's consolidated statement. The shareholding ratio is 45%, and the shareholding ratio is 35%. There are 2 distributors and 75 distributors. From January to June 2019, the operating income of holding dealers in consolidated statements was 1.08 billion yuan, including 472 million for pesticide preparations, 449 million for chemical fertilizers, and 155 million for agricultural services (main seed agricultural machinery, cultivated land sowing and spraying, harvest and drying warehousing, agricultural products trade, etc.), with a year-on-year growth rate of 17.92%.
Focus on core crops and create a whole industry chain model of planting plus agricultural materials. The company focuses on core crops such as Huolongguo, while other crops are modeled and replicated by MVP at the same time, thus finding a feasible and sound way.
Hongxin Huolongguo has a layout of more than 7000 mu in the way of self-planting and cooperation, unites 100 orchards and heaven and earth people, has the right of independent varieties, gives full play to Hainan's unique anti-seasonal climate advantage, and creates the best quality planting and production; gather and build a talent system with industrial scientific research experts and planting experts as the core, and explore a way of industrial development by the company + farmers + employees + field manager partnership.
Profit forecast. The company is the leading enterprise of pesticide preparation in China. We estimate that the EPS of the company in 19-21 will be 0.25 EPS 0.34 PE 0.38 yuan, which will be 16-20 times RMB in 2020, corresponding to the reasonable value range of 5.44-6.8 yuan, which is better than that of the big market.
Risk hint. The price of raw materials fluctuates; the progress of agricultural material platform is slow.
