Main points of investment:
The company released 2021 annual report: the company achieved revenue of 3.699 billion yuan (YoY+15%) and net profit of 450 million yuan (YoY+11%), of which Q4 revenue of 1.116 billion yuan (YoY+70%, QoQ+79%) and net profit of 139 million yuan (YoY+88%, QoQ+68%) benefited from the sharp rise in product prices in the fourth quarter, revenue and profit increased significantly compared with the previous quarter, and the performance was in line with expectations.
The company released the first quarterly report of 2022: in the first quarter, the company achieved revenue of 1.2 billion yuan (YoY+7%, QoQ+8%) and net profit of 143 million yuan (YoY+9%, QoQ+3%). The performance was in line with expectations.
The high price of the main products fell and stabilized, and the sales volume of pesticides increased steadily: under the influence of domestic power restrictions and production restrictions, the market prices of the company's main crude drug products rose sharply in the fourth quarter of 2021, and with the elimination of relevant influencing factors, product prices began to fall in 2022. Global grain and oil prices have led to an upward boom in agrochemical demand, superimposed energy costs, and product prices have basically stabilized. According to the price data of Zhongnong Lihua, the average price of imidacloprid in Q1 market in 2022 is 1869,000 yuan / ton (YoY+53%,QoQ-22%), acetamiprid 1846,000 yuan / ton (YoY+62%, QoQ-22%), pyrazolyl ester 2588000yuan / ton (YoY+65%, QoQ-6%). The company sold 46400 tons of pesticides in 2021, an increase of 15% over the same period last year. The company's annual sales gross profit margin in 2021 was 29.71%, reducing 0.18pct compared with the same period last year, and 2022Q1 quarterly sales gross margin 29.41%, reducing 1.84pct year-on-year and increasing 0.83pct on a month-on-month basis. The net interest rate for the whole year of 2021 is 12.16%, which is 0.44% lower than the same period last year. The net interest rate of 2022Q1 is 11.89% lower than the same period last year. The net interest rate is higher than the same period last year, and the 0.54pct is lower than the previous year.
Plus prothionazole to consolidate the leading position, Hengning project gradually injected growth momentum: the company plans to invest about 300 million yuan in the coastal economic and technological development zone to expand 3000 tons / year prothiazole raw drug production capacity. The company has a design capacity of 2000 tons of albendazole, and a planned design capacity of 8000 tons in the second phase of Qingdao Hengning. The total production capacity of the company is expected to reach 13000 tons in the future. As a rare domestic registration certificate holder of this product, through continuous capacity expansion, the company has consolidated the company's leading position in the domestic market by virtue of the advantage of scale and cost. At the same time, the first phase of Qingdao Hengning project planned by the company is expected to gradually release 3000 tons of difenoconazole, 2000 tons of butyl ether urea and 2000 tons of fipronil, and the second phase of Hengning project has also been officially launched. By the end of 2022, the project under construction of the company was 722 million yuan, an increase of 5.59 yuan and 134 million yuan respectively compared with the same period and the previous month. The gradual expansion of Hengning project will open up the space for the company's sustainable growth.
Investment analysis opinions: combined with the progress of the company's new projects and the prosperity of product prices, the company's 2022-2023 net profit is forecast to be 6.11 yuan and 736 million yuan (the original value is 5.75 yuan and 656 million yuan), and the new 2024 net profit is forecast to be 884 million yuan, corresponding to 13x, 10x and 9X respectively, maintaining the "overweight" rating.
Risk hint: the progress of the new project is not as expected; the price of products has fallen sharply; the price of raw materials has fluctuated sharply.