In 2019, the company achieved revenue of 1.575 billion yuan, down 3.75% from the same period last year; net profit from home was 205 million yuan, down 18.49% from the same period last year; and net operating cash inflow was 400 million yuan, an increase of 153.86% over the same period last year. The revenue of Q1 in 2020 was 368 million yuan, an increase of 2.10% over the same period last year, and the net profit of returning home was 24.95 million yuan, down 38.57% from the same period last year. The decline in profits over the same period of last year is mainly due to the fact that Liaoning Xianda is in the preparation period, resulting in certain fixed fees (Liaoning Xianda lost 31.08 million yuan in 19 years). At the same time, the rise in raw material prices and labor costs led to a decline in gross profit margin.
Herbicides declined, while fungicides remained strong: the company's herbicide revenue in 2019 was 1.34 billion yuan, down 8.07 percent from the same period last year, with a gross profit margin of 32.78 percent, with a decrease in 3.23pct. Among them, the volume and price of herbicide tobacco rose to achieve sales of 100 million yuan (yoy+46%), 217 million yuan of isosinone (yoy-30%), 188 million yuan of imidacarb tobacco (yoy-22%), and 605 million yuan of enoxone was basically the same as the same period last year. In Q1 in 2020, the prices of clomazone and imidacloprid increased by 9.54% and 18.55% respectively compared with the same period last year. The price of enoxone fell sharply due to increased sales and remained stable. Fungicide sector, revenue of 149 million yuan in 2019, an increase of 42.04% over the same period last year, and a gross profit margin of 61.75%, an increase in 12.91pct over the same period last year, mainly due to the increase in the price of enoylmorpholine (yoy+31.12%). Affected by the decline in the price of enoxone, the company's Q1 gross profit margin in 2020 was 30.52%, a year-on-year reduction of 1.92pct. In addition, affected by the increase in transportation costs, the company's expenses increased significantly in the first quarter, with a total expense rate of 20.08%, an increase in 1.89pct compared with the same period last year.
Huludao Phase I construction completed, Phase II relay, short-term hindrance does not change long-term growth: the company's Huludao Phase I project of 6000 tons of crude drugs and 10,000 tons of preparations has been completed, and production benefits have not been released for the time being due to safety accidents. Following the first phase of the project, the Huludao second phase 5000 tons of alkenone, 10,000 tons of alkali sulfide, 9000 tons of molten salt project began to relay. Although it is affected by the accident in the short term, in the long run, with the strong control over the products and the products with high return on investment in the large-scale construction of Huludao base, the long-term growth space is still worth looking forward to.
Profit forecast: in view of the adverse effects of the external environment, we adjust the company's 2020-2021 return net profit to 1.65 yuan and 210 million yuan, and add 254 million yuan to 2022 net profit forecast, corresponding to PE 14x, 11x, 9X respectively, given the "overweight" rating.
Risk hints: product prices have fallen sharply; project progress is lower than expected; safety and environmental protection risks
