Event: the company issued a forecast for the first quarter of 2020. During the reporting period, the company is expected to achieve a net profit of 41.285 million yuan to 43.1616 million yuan, an increase of 120% over the same period last year.
Core idea: the company got off to a good start in the first quarter of 2020 despite the COVID-19 epidemic for three reasons:
1) provide stable supply capacity during the epidemic, ensure the normal operation of domestic and foreign production bases and marketing networks, and ensure that the needs of downstream customers are met. Internationally, the technical renovation project carried out by the company in OCP, Morocco is normally implemented; domestically, the company cooperates with Silbo and China Railway Logistics, which is the main chemical logistics company of China Chemical International (600500.SH), to ensure that the supply and service of fertilizer auxiliaries can still be carried out stably and continuously during the epidemic. According to the investor relations activity record table released by the company in February 20, a considerable number of customers sought support and emergency response from the company during the epidemic, so as to gain the first opportunity for the company to increase its market share. From the Q1 performance forecast, the company to solve the transportation problem during the epidemic, timely meet the needs of downstream customers, but also further improve the market share; at the same time, the company also through online sales services, so that sales costs have been further reduced.
2) organize live broadcast activities during the epidemic, give full play to the influence of domestic leading enterprises in digital agriculture, and open online marketing channels for digital agriculture business. As the chairman of the Digital Agriculture Branch of the China Agricultural Technology extension Association, the company organized a series of live broadcast activities of "Anti-epidemic situation and Spring ploughing" during the epidemic, which enhanced the company's influence and popularity in the field of digital agriculture. as a result, the income of new businesses related to digital agricultural technologies such as soil testing and special fertilizers has been greatly increased.
3) in the continuous realization of the application of digital agricultural technology achievements in commercialization, the second curve of the company's development is gradually forming.
Since the company transformed and upgraded to digital agriculture in 2016, with "soil" as the core, it has accumulated a large number of "sticking" technology of digital agriculture, which can basically cover the needs of all aspects of the planting chain and effectively improve planting efficiency. In January 2020, the company issued a related announcement on the proposed establishment of soil big data Research Institute with Zhongguancun big data Industrial Alliance, which will accelerate the industrialization of soil big data achievements. In the February record sheet of investor relations activities, the company mentioned that it would create a second curve of the company's development by providing services such as intellectual property transfer. According to the first quarter results forecast, the company's income from technical consulting and other services related to intellectual property transfer business is growing rapidly, including products and services such as technical consulting, process design, dedicated equipment and supporting auxiliaries. We believe that the company already has a feasible realization model in the transformation of digital agricultural technology achievements. In the future, as the company's technology is gradually recognized by the market, the second curve of the company's development will gradually take shape and will provide stable potential energy for the company's performance growth.
Profit forecast and investment advice: 1) according to the company's 2019 performance forecast revision, affected by the epidemic, the company and Morocco OCP on digital agriculture and fertilizer intellectual property transfer contract series involving income recovery progress was affected 2) the domestic traditional auxiliaries business has been reduced due to the zero growth of downstream chemical fertilizers. In 2019-2021, we lowered the company's revenue to 5.9pm 80lb 1.04 billion yuan (the previous value was 7.2pm 9.4 / 1.23 billion yuan), and the net profit was 0.717pm RMB (the previous value was 1015x230 million yuan). We are optimistic about the expansion of the company's overseas business And the process of commercialization of digital agriculture is accelerated to maintain the "buy" rating.
Risk Tip: officially announce the risk of performance change, and the company's development / business cooperation is not as expected.
