Event: the company released the three-quarter report of 2022, the first three quarters of the company realized revenue of 3.803 billion yuan (year-on-year + 47.20%) and net profit of 431 million yuan (year-on-year + 38.41%). Among them, 22Q3 realized revenue of 992 million yuan (year-on-year + 59.00%) and net profit of 101 million yuan (year-on-year + 22.68%).
The price of crude drug products is higher than the same period last year, and the short-term constraints are expected to be eliminated: the company is mainly engaged in the research, development, production and sale of pesticide preparations, pesticide intermediates, pesticide raw drugs and water-soluble fertilizers, including insecticide series and fungicide series. In recent years, the company has continuously deepened the integration strategy of preparations, drugs and intermediates on the basis of the existing imidacloprid, acetamiprid, meveramil and pyrazole. According to the announcement, the Qingdao Hengning Phase I project involving insecticide butyl ether urea, fipronil, fungicide difenoconazole and propiconazole entered the trial production stage in June 2022, and the company's production scale has been effectively expanded. During the reporting period, the prices of the company's main products rose year-on-year. According to the announcement, the prices of pesticide products and fertilizer products in the first three quarters of 2022 were + 28.15% and + 0.90% respectively, providing strong support for the company's revenue and profit increase compared with the same period last year. 22Q3's revenue and profit have declined from the previous year, mainly due to the constraints of the off-season. In the future, with the orderly recovery of production activities, the company's profitability is expected to gradually appear.
The product layout continues to advance, and the industrial chain extends gradually: in recent years, the company continues to carry out diversified product layout and its own scale expansion. In April 2021, the company issued an announcement. After the first phase of the Hengning project, the second phase project of Qingdao Hengning Biotechnology Co., Ltd. was planned, and a notice was issued in April 2022 to invest 301 million yuan to build a "new construction project of new fungicides, herbicides and intermediates". Involving 3000 tons / year of prothiazole and other crude drug products and by-products, with the gradual progress of related projects in the future, the company's product layout is expected to be further improved. At the same time, the company continues to extend the industrial chain, and announced in June 2022 that it intends to buy 26% of the shares of Shanxi Jinxinyi. According to the announcement, one of the main products is one of the important intermediates of the company's fungicide product prothiazole, and the stability of the company's core supply chain is expected to be improved in the future. The strategic layout of intermediates-APIs is expected to be strengthened, contributing to the improvement of the company's profitability.
Investment advice: we expect the company's net profit from 2022 to 2024 to be 561 million yuan, 928 million yuan and 1.26 billion yuan respectively.
Risk hint: the project landing is not as expected; the macro environment is not as expected.