occurrences
On April 22, the company released its quarterly report for the first quarter of 2024. The company achieved revenue of 3.175 billion yuan, -29.43%; net profit to mother of 429 million yuan, or -43.11% year-on-year; net profit after deducting non-return to mother of 426 million yuan, or -40.22% year-on-year. The performance was in line with expectations.
profiling
The year-on-year decline in the company's product prices affected the company's short-term performance. By business, in the first quarter of 2024, the company's original drug business achieved revenue of 1,724 million yuan, with a price of 691,000 yuan/ton, or -32.78%; the formulation business achieved revenue of 861 million yuan, with a price of 57,500 yuan/ton, +10.16% over the same period last year. At the raw material level, the company's main raw materials declined to varying degrees.
The market price of the company's products is currently at a historically low position. In terms of product prices, the main pesticide product Kung Fu methrin is currently priced at 107,000 yuan/ton (the lowest price in history, data started in 2015), the current price of biphenthrin is 137,000 yuan/ton (the lowest price in history, data started in 2015), and the main herbicide product glyphosate is currently priced at 26,000 yuan/ton (historical classification of 12.78%, data starting in 2015); in terms of biocides, the company's price of phenyclomethrin is 97,000 yuan/ton (historical lowest price, data started in 2015), pyrazole ether The current price is 160,000 yuan/ton ( The historical fraction is 2.56%, and the price of propiconazole is 77,000 yuan/ton (the lowest price in history, data started in 2015).
The Huludao project investment brought a new round of growth to the company. The company is currently under construction of 1,609 billion yuan, mainly products at the Huludao base, including: an annual output of 15,650 tons of pesticide raw materials, 7,000 tons of pesticide intermediates, and 66,133 tons of by-product projects, including: microsin, dimethoxazole, kung futhrin, flazolamide hydroxylamine, salvir phosphorus, tetracloxamide, etc. Among them, fluazol hydroxylamide is Syngenta's innovative drug. We believe that the above API project will contribute revenue and profit to the company after it is put into operation.
Profit Forecasts, Valuations, and Ratings
We expect the company's net profit forecasts for 2024-2026 to be 1,763, 20.25 and 2,324 billion yuan, respectively; EPS is 4.34, 4.98, and 5.72 yuan, respectively. The PE corresponding to the current market value is 14.00X, 12.18X, and 10.61X, respectively, maintaining a “buy” rating.
Risk warning
There is a risk of sharp fluctuations in raw materials, insufficient demand affects sales volume and product prices, and the launch of new projects falls short of expectations.