Event
The company reported revenue of 2.026 billion yuan in 2020, down 5.70% from the same period last year, and net profit of 289 million yuan, an increase of 186.20%, deducting 271 million yuan of non-return net profit, an increase of 138.39% over the same period last year.
Main points of investment
The improvement of the price of core products drives the company's performance up. The failure to renew the safety production license of Jiangxi Guixi base at the end of 19 years is the main reason for the company's revenue decline compared with the same period last year; the profit exceeded our expectations, mainly due to the double operating rate and price increase of the company's core products. Looking forward to the future, the supply pattern of carbamate pesticides will be significantly improved. Under the background of the general downward trend of pesticide prices in 2020, we expect that raw drug prices can be maintained at a high level.
Future performance growth is determined. 3000 tons of butyl sulfur in the new plant in Guixi was put into production at the end of February 21, and 3000 tons of methanesulfonate is in steady progress. Considering the strong synergistic effect of butyl sulfur and methanesulfonate, customers are expected to be more sticky than their competitors. At the same time, the product layout of Guixi base can also see some positive changes in the company's concept of production and management.
Ningxia base is worth paying attention to. In order to ensure the double backup of key raw materials, the company went to Ningxia to send pesticide business, and the Ningxia base is expected to carry the backup function of phosgene derivatives. According to the half-yearly report, Ningxia Base is currently carrying out the optimization demonstration of the technical scheme and the evaluation of the scheme design, as well as communicating with the local government on the three evaluation, land use and other issues.
Profit forecast and investment rating: due to the improvement of the price of the company's core products, we raise our profit forecast for 2021. The company's operating income for 2020-2022 is expected to be 20.26yuan, 2.46 billion yuan and 2.772 billion yuan respectively, and the net profit of returning to the mother is 289 million yuan, 347 million yuan (the previous value is 326 million yuan) and 416 million yuan respectively, and EPS is 0.81,0.98 yuan and 1.17 yuan respectively. The current share price corresponds to PE of 13x, 10x and 9X respectively. Taking into account the changes that are taking place in the texture of the company, the growth is gradually reflected and the "buy" rating of the company is maintained.
Risk hint: the production progress of the project under construction is not as expected; crude oil drives the price of polyolefin to fluctuate greatly.
