Financial Services Association, October 23 (Reporter Zhao Zixiang) Affected by the decline in the agrochemical market, sales prices and sales volume of agricultural chemicals in Jiangshan Co., Ltd. (600389.SH) declined markedly, and the company's net profit plummeted 80% in the first three quarters. Among them, the average sales price of the main product, herbicides, fell by more than 20,000 yuan/ton year on year in the first three quarters, and pesticides also experienced a sharp drop in volume and price.

Tonight, Jiangshan Co., Ltd. released its report for the third quarter of 2023, showing that it achieved operating income of 3.603 billion yuan in the first three quarters, a year-on-year decrease of 49.26%; net profit to mother was 257 million yuan, a year-on-year decrease of 84.81%.

Among them, the third quarter achieved operating income of 930 million yuan, a year-on-year decrease of 50.24%; net profit to mother was 62.8112 million yuan, a year-on-year decrease of 86.80%.

Regarding drastic changes in performance, Jiangshan Co., Ltd. announced that the decline in revenue was due to a drop in product sales prices and a decrease in sales volume during the reporting period. The decline in net profit, on the other hand, was affected by a decrease in product gross profit during the reporting period.

Jiangshan Co., Ltd. said when it released its semi-annual report earlier that the pesticide industry has experienced cyclical fluctuations. International food prices have continued to decline from a high level in the same period last year, demand for pesticide terminals is sluggish, overseas markets are dominated by consumption stocks, domestic pesticide stocks are high, and pesticide product prices continue to fall. With the release of new pesticide production capacity in the western region in the previous two years, domestic pesticide overcapacity further intensified, and competition became more intense.

The degree of change in the market environment can be seen from the fluctuation in the company's product prices. According to the main business data announcement for the third quarter disclosed by Jiangshan Co., Ltd. that night, the average price of herbicide products in January-September was 36051.91 yuan/ton, down 38.59% year-on-year from the same period last year, and the price difference exceeded 20,000 yuan per ton. At the same time, the month-on-month decline in the third quarter reached 21.94%, and the price decline continued.

In addition, prices of insecticides, chlor-alkali products, and flame retardants (phosphorus-based) products decreased by 15.18%, 25.40%, and 10.34%, respectively, over the same period last year. Although the month-on-month change ratio has slowed, they have all been negative.

In terms of sales, according to operating data, the production of herbicide products in January-September was 47175.17 tons, the sales volume was 46729.37 tons, and the sales amount was 1,685 billion yuan. Compared with the herbicide data of 74958.84 tons (production), 80283.24 tons (sales), and 4.714 billion yuan (sales amount) of herbicides for the same period from January to September 2022, the overall change was very obvious.

On the same night, Jiangshan Co., Ltd. also added a new investment plan to the previous disclosure. The company plans to support the construction of a steam pipeline public pipe gallery on the basis of the investment and construction of the “Heating Center Phase 1 Project” disclosed earlier. The company plans to invest 640.12 million yuan in the first phase of the heating center project, and the total investment was adjusted to 866 million yuan.

According to the announcement, the construction period of the project is 9 months, and it is expected to be completed and put into use by the end of March 2024. The public pipe gallery built in the project is municipal infrastructure. The company said that after completion, the project can provide more complete supporting facilities for the resident enterprises, which is conducive to the standardized management, inspection and maintenance of steam pipelines.