Event: the company achieved operating income of 1.54 billion yuan in the first three quarters of 2020, down 12.6% from the same period last year, and its net profit was 200 million yuan, an increase of 162.6% over the same period last year.
The company is the largest carbamate pesticide raw drug enterprise in China. Hunan Haili pesticides are mainly carbamate pesticides, the leading products carbofuran, propoxur, carbaryl, furan phenol, o-butylphenol and so on have a high market share at home and abroad. In addition to pesticides, the company also has reserves of highly effective herbicides, fungicides, phosgene products and other fine chemical products. Since 2014, the company's business began to expand in the direction of heterocyclic pesticides and fungicides, and successively plans to spend 840 million yuan to build the production capacity of a number of pesticides and fungicides, compared with traditional carbamate pesticides, most of these pesticides and fungicides are large tonnage varieties or low toxic varieties, which have a certain development potential and space. At present, the company has a production capacity of 5800 tons of carbofuran, 4500 tons of methomyl, 1000 tons of propoxur, 3200 tons of carbaryl, 4500 tons of aldicarb, 1800 tons of butyl sulfur, 1000 tons of pyrimidine methyl, 3200 tons of thiophanate, 4000 tons of dimethomyl and 3200 tons of aldicarb.
The company has further increased its market share in carbamate pesticides. There are 17 varieties of carbamate insecticides, and the market size is stable at about US $1 billion. Carbamate insecticides with high toxicity are carbofuran, methomyl, dimethomyl and so on, which have been restricted in our country. In the future, the market space of carbamate pesticides will be left to new varieties with high efficiency and low toxicity, such as indenyl, thiosulfan and so on. Hunan Haili established trade relations with Bayer in 2006, and the two sides signed a memorandum of cooperation on Tishuangwei project in 2015, entering the stage of strategic cooperation. Hunan Haili in the wholly-owned subsidiary Changde agricultural chemical production capacity of 4000 tons of thiosulfan has seized the original high-toxic pesticide market in the past few years, and the company's market share in carbamate pesticides has further increased.
The company is still in a period of growth, and the prices of core products continue to rise. The company is still in a period of growth. On the one hand, Changde base and Guixi New area project will have new capacity release to bring performance increment in 2020-2021. In addition, Ningxia base will also be the main war zone for the company's next project construction in the future. the company plans to gradually transfer the original main product line of Hali Guixi to Haili Ningxia for production, including carbaryl, methomyl, methyl thiophanate, Zhong Dingwei and isoprocarb. The prices of the company's six major products have continued to rise in the past four years, mainly because other enterprises have not seen new production capacity, and some enterprises have contracted the overall supply of the industry due to environmental protection and other factors. It is expected that the industry as a whole is still in short supply in the future, and the price of the company's related products is expected to run high. In the third quarter, the price of the company's products rose faster than expected, resulting in a better-than-expected performance.
Profit forecast and investment advice. It is estimated that the company's EPS from 2020 to 2022 will be 0.72,0.80,0.88 yuan. We select the pesticide industry leaders Yangnong Chemical and Lear Chemical as comparable companies to give the company a 20-fold valuation level in 2020, with a target price of 14.4 yuan, covering for the first time and giving a "buy" rating.
Risk tips: raw material prices or large fluctuations, downstream demand is not up to expectations, product ban risk, project production time is lower than the expected risk.
