Event: 1. Xianda shares disclosed its annual report in 2019, with operating income of 1.575 billion yuan in 19 years, down 3.8% from the same period last year, and net profit of 205 million yuan, down 18.5% from the same period last year. two。 In the first quarter of 20 years, the company's operating income was 368 million yuan, up 2.1% from the same period last year, and the net profit was 24.95 million yuan, down 38.6% from the same period last year. The non-net profit was 26.79 million yuan, down 32.4% from the same period last year.
Comments: 1. 2019 performance is basically in line with expectations. The company's net profit in 2019 decreased by 18.49% compared with the same period last year. On the one hand, the gross profit margin of the main business fell 1.3pct compared with the same period last year, and on the other hand, the related expenses increased during the period of preparation for the construction of Liaoning Xianda. From a product point of view, the company's herbicide revenue was 1.34 billion yuan, down 8.1% from the same period last year, gross profit margin was 32.8%, down 3.2 pct; fungicide revenue was 149 million yuan, up 42.0%, gross profit margin was 61.8%, up 12.9 pct over the same period last year; intermediate income was 71 million yuan, up 129.6% year-on-year, gross profit margin was 29.7%, an increase of 5.9pct.
2. The performance in the first quarter of 20 was slightly lower than expected, and the price of enoxone rebounded, which was good for the company's performance. The 20-year net profit of Q1 fell 38.57% compared with the same period last year, due to the decline in the price of the company's alkenone series products, down 31.4% from the same period last year, and the increase in costs caused by the impact of factory accidents in Liaoning and the impact of the epidemic. At present, the price of enoxone is gradually recovering. according to Zhongnong Lihua raw drug data, the original drug has risen from 128,000 yuan / ton at the beginning of the 20th to 150,000 yuan / ton (2020-05-03 price), an increase of 17.2%.
With the gradual recovery of the price of enoxone, it is good for the performance of the company.
3. Focus on the medium-and long-term growth of the company. On the one hand, the company expands the scale of production capacity, achieves economies of scale and reduces costs, on the other hand, it innovates and develops new products. The first phase of the company Huludao 3000 tons of enoxone raw drugs, 10000 tons of preparation project, 2000 tons of enoylmorpholine raw drug project has been successfully trial production. The second phase of the project started construction of 5000 tons of alkenone raw drugs, 10000 tons of alkali sulfide and 9000 tons of molten salt, and the main body has been completed. The company attaches importance to research and development, independent research and development ability, in the creation of pesticides layout investment, quinolone, prazolium ester and other raw drugs are in the research and development stage. The company has obvious medium-and long-term growth.
Profit forecast and investment advice: the prices of some of the company's products fall, affecting the near-term performance. The gradual construction of the company's Huludao base has brought new increments, the R & D of the original drug has been continuously promoted, and the company has obvious medium-and long-term growth. We downgrade the 20-21 year profit forecast and increase the 22-year profit forecast. We expect the net profit for 20-22 years to be 1.81 hundred and ninety-nine million and the EPS to be 1.62, 2.77 and 3.56, respectively. With reference to the valuation of the comparable company, we give the company 16 times PE in 20 years, with a target price of 25.92 yuan, maintaining the "buy" rating.
Risk tips: chemical safety production risk; downstream demand decline risk; pesticide price downward risk; product market development risk and international trade risk; R & D progress of creating pesticides is not as expected.
