Incident: Yangnong Chemical released its 2024 quarterly report, achieving operating income of 3.176 billion yuan, a year-on-year decrease of -29.43%; net profit attributable to shareholders of listed companies was 429 million yuan, a year-on-year decrease of 43.11%. Based on a total share capital of 406 million shares, the diluted earnings per share were 1,056 yuan.
The industry sentiment was low, and sales and prices in the first quarter were under pressure. The company's revenue for the first quarter fell by about 29% year on year (down about 1,324 million yuan from the same period last year). Among them, revenue from original drugs, pharmaceuticals, trade and other businesses was 17.24 million yuan, 8.61 million yuan, and 590 million yuan respectively, down from the same period last year; among them, the contraction in the original drug business revenue was the main reason for the decline in revenue.
In terms of sales volume, the company achieved sales of 25,000 tons and 15,000 tons of original drugs and formulations in the first quarter, down about 11% and 21% respectively from the same period last year (a decrease of about 2,990 and 4053 tons). In terms of prices, the average prices of the company's original drugs and formulations in the first quarter were 6.91 and 57,500 yuan respectively, down 33% and 10%, respectively, from the same period last year (according to Baichuan data, the sales volume and sales price of the main pharmaceutical products kung fu thrin the first quarter, biphenthrin, glyphosate, propiconazole, phenythromycin, fluconazole, etc. fell 35%, 36%, 40%, 14%, 39%, 50%, 36%, 20%, respectively) The sales volume and sales price of the original pesticide business in the first quarter all fell 35%, 36%, 40%, 14%, 39%, 50%, 36%, and 20%, respectively. It has been under a lot of pressure.
Fee control continues to increase. Among the company's period expenses, the company's four expenses decreased by about 116 million yuan compared to the same period last year. Of these, management expenses, R&D expenses, and financial expenses were reduced by about 0.59 million yuan, 0.42 million yuan, and 15 million yuan (positive impact on net profit); in addition, credit impairment losses increased by 46 million yuan year on year (negative impact on net profit, and the company recovered from credit impairment losses in the same period last year).
The Liaoning Youchuang project is progressing steadily, and 24-year growth can be expected
In 2023, the company made Liaoning Youchuang the focus of project construction, with the goal of building a world-class digital flagship factory, completing 37 buildings as scheduled before freezing in November 2023 to achieve transition operations from outside to indoor, speed up the completion of phase 1 installation and commissioning, and accelerate phase 2 construction; at the same time, the company is preparing a list of phase 2 projects. In addition, the commissioning of the Youjia Phase 4 Phase 2 project was completed at the end of November, and production results were achieved quickly, and the Youjia Phase 5 project was accelerated simultaneously; the above is expected to become an important source of growth for the company in 2024.
Profit forecast and valuation: Profit forecast and valuation: Taking into account changes in the company's product prices and project progress, the company's net profit from 2024 to 2026 is estimated to be 16.2/19.4/2.42 billion yuan, respectively, maintaining a “buy” investment rating.
Risk warning: The pesticide boom is declining, product prices are falling, raw material prices fluctuate sharply, the progress and profit of new projects are lower than expected, the risk of abnormal climate and exchange rate risks.