The company releases its third-quarter results. The company's revenue in the first three quarters was 4.731 billion yuan, an increase of 4.17% over the same period last year. The net profit returned to the mother was 204 million yuan, an increase of 73.23% over the same period last year. The net profit after deducting non-return was 194 million yuan, an increase of 94.70% over the same period last year. In the third quarter, the company achieved a total operating income of 1.37 billion yuan, down 3.81% from the same period last year, and the company's net profit was 65.8 million yuan, an increase of 305.60% over the same period last year.
The rise of compound fertilizer has led to an increase in gross profit margin. Thanks to the downward price of elemental fertilizer, the company's gross profit margin of compound fertilizer products expanded. In the third quarter, the company's sales gross profit margin was 21.01%, which was significantly higher than 2019Q3's 7.49pct and 0.54pct compared with the previous quarter. In the long run, the price of elemental fertilizer is weakened by the marginal impact of supply-side reform, and the three major elemental fertilizers all have new production capacity, the price upward space is limited, and compound fertilizer enterprises will have stronger pricing power. the company is expected to benefit from the coming business cycle of compound fertilizer.
Cash on hand has increased significantly, and the expense rate has been stable during the period. The fourth quarter is usually the off-season of compound fertilizer. During the reporting period, the company's purchase of raw materials decreased and the collection of goods sold increased. The net operating cash flow was + 45.12% compared with the same period last year. At the same time, the company's redemption due brokerage financial management led to an increase in investment cash flow. At the end of the third quarter, the company's monetary funds reached 26.
6.3 billion yuan, plenty of cash on hand. In terms of expenses, in the first three quarters, the company's sales expense rate was 5.94%, management expense rate was 3.17%, R & D expense rate was 3.16%, and financial expense rate was-0.62%. Except for R & D, the expense rate was lower than that in 2019.
The company has formed a trinity system of soil detection, fertilizer production and agrochemical service. In terms of agricultural services, the company has established an agrochemical service team with more than 50 professional agrochemical personnel, using crop manager system to provide in-depth and fixed-point services, covering corn, wheat, rice and other field crops. Vegetables, fruit trees, flowers and other cash crops, covering the north and south planting areas. Agrochemical service forms include demonstration fields, technology going to the countryside, market visits, agrotechnical meetings, market agrochemical problem solving and follow-up, nutrition plan formulation and other basic forms (with regard to land circulation, the company's official website information has been updated, this part is not covered, and the follow-up needs to be tracked), but also through the earthworm soil testing laboratory established in cooperation with the American AgSource laboratory, using advanced technology to provide soil testing services for growers, etc. Various forms of agrochemical services effectively promote the sale of products.
The company has a national production capacity layout and rich marketing experience, and the company's advantages in the upward period of the industry are expected to be brought into full play. The company focuses on the production and sales of compound fertilizer, and has set up production bases in Shandong, Jilin, Henan, Hubei, Guangxi, Jiangxi, Gansu, Liaoning, Xinjiang and other regions with a sales network all over the country. with more than 1000 people with rich sales experience of the sales team, opened up more than 3000 first-class dealers, more than 100000 terminal outlets. "Stanley" brand compound fertilizer has become one of the brands with the largest single brand sales in the country.
Risk hints: the price of compound fertilizer products changes greatly; the price of simple fertilizer fluctuates greatly; the downstream agricultural demand is lower than expected; the report information comes from public data, and there may be a risk of lag in updating public information.
Profit forecast: the net profit from 2020 to 2022 is expected to be 217 million yuan, 415 million yuan and 503 million yuan respectively, corresponding to PE is 29-15-13 times, to maintain the buy rating.
