Event: on the evening of October 26, the company released its third quarterly report for 2022. In the first three quarters of 2022, the company achieved revenue of 28.078 billion yuan, an increase of 24.85% over the same period last year; a net profit of 768 million yuan, a year-on-year reversal of losses, an increase of about 772 million yuan; and a net profit of 659 million yuan, an increase of about 721 million yuan. 2022Q3, the company achieved a revenue of 9.282 billion yuan in a single quarter, an increase of 25.02% over the same period last year, and a net profit of 36.05 million yuan, an increase of about 407 million yuan over the same period last year.
Driven by demand and cost, the volume and price of plant protection products rose steadily, and the revenue of 22Q3 maintained a high growth rate. In 2022 Q3, the company's product sales price increased by 18% year-on-year, and sales increased by 6% compared with the same period last year. On the demand side, global agricultural prices rose further sharply in 2022 due to the conflict between Russia and Ukraine. Although global agricultural prices have adjusted slightly since the end of June, they are still at a relatively high level in history. Under the stimulation of high-priced agricultural products, farmers' willingness to plant has increased, coupled with the expansion of global acreage, which has led to a rise in the volume and price of plant protection products.
From the cost point of view, the price of upstream raw materials has experienced a slight correction, but it is still at a high level, which gives cost support to plant protection products. In terms of business segments, sales of 2022Q3's crop protection products increased by 18.0% year-on-year, including sales of herbicides, pesticides and fungicides up 29.5%, 5.8% and 14.5% respectively, while sales of fine chemical products increased by 23.6%. In terms of profitability, due to the decline in the prices of some pesticide products, the company's 22Q3 gross profit margin fell to 24.4%, a month-on-month decline of 2.56pct, a year-on-year decline of 2.35pct.
Strong demand in the Latin American market has greatly increased compared with the same period last year, while the Chinese market continues to drive the demand for fine chemicals. 22Q3, on the premise of measuring in US dollars, the company's sales in Latin America and Asia-Pacific markets grew rapidly, up 47.3% and 22.4% respectively compared with the same period last year, while sales in Europe and North America fell slightly by 4.0% and 4.7% respectively due to local dry weather and other factors. 22Q3, Latin America accounts for 83% of the company's global sales growth. The growth of the Latin American market is mainly due to the approaching peak season of Q4 planting and the sharp increase in demand for plant protection products from soybean, corn, sugar cane and cotton growers in Brazil. Other Latin American countries also maintain strong demand for plant protection products under unsatisfactory weather conditions. In the Asia-Pacific market, the growth of sales in China contributed the main increment. 22Q3, sales in China increased by about US $35 million over the same period last year, accounting for about 80 per cent of sales growth in the Asia-Pacific market. 22Q3 fine chemical products continue the strong performance of 22Q2 in the Chinese market and are the main driving force for the rapid growth of sales in China.
Profit forecast, valuation and rating: the company's 22Q3 revenue maintained a high growth rate due to the rise in the volume and price of plant protection products, but the 22Q3 profit level was slightly lower than expected due to the decline in the company's gross profit margin. We respectively reduced the company's 22-24 net profit of homing by 13.1%, 12.4%, 10.8% to 10.26, 11.98, and 1.399 billion yuan, respectively.
We continue to be optimistic about the follow-up performance of the company as the global leader in generic pesticide preparations and maintain the company's "buy" rating.
Risk tips: fluctuations in raw materials and transportation costs, lower-than-expected downstream demand, environmental protection and production safety risks.