Event: the company issued a semi-annual performance forecast for 2019 and estimated that the net profit attributed to shareholders of listed companies in the first half of 2019 was 48.8933 million yuan to 58.2063 million yuan, an increase of 5% and 25% over the same period last year.
Focus on expanding overseas markets, and fertilizer auxiliaries business continues to grow.
In the first half of 2019, the company continued to promote the rapid growth of chemical fertilizer auxiliaries business performance in the following ways: 1) enhance the competitiveness of products and launch new auxiliary products. According to the company announcement, the new nutritional auxiliaries with nutritional efficiency developed by the company have begun to fall to the ground; 2) expand the new market and strengthen the regional layout of new fertilizer production capacity along the "Belt and Road Initiative" line. In 2017, the company began cooperation with Morocco's OCP Chemical Fertilizer Group, the world's largest exporter of phosphate rock and phosphoric acid, and in recent years has explored a more mature strategy: by exporting "differentiated products + full-process technical services + automatic control system" model to meet OCP's increasing demand for auxiliaries and transformation to digital agriculture in the context of the rapid growth of the African fertilizer market. Corresponding to the company's products, we believe that this model specifically refers to a complete set of solutions for providing products such as high-quality chemical fertilizer auxiliaries and new auxiliaries + supporting technical guidance services + intelligent fertilizer dispensing machines; 3) improve business efficiency, continue to integrate international chemical fertilizer auxiliaries marketing channels. The company acquired Novik of the Netherlands and PST of France in 2015 and 2017 respectively. Since then, the integration of the two in R & D, procurement, production and marketing has continued to this day, which we believe will continuously improve the operational efficiency of the company's fertilizer auxiliaries business in Europe.
Accelerate the commercial promotion of the "cool techs", and the revenue of digital agriculture has appeared.
The company began its efforts in digital agriculture in 2016, and has since continued to search for relevant "cool techs" around the world, and has been trying to apply these technologies to improve agricultural efficiency. At present, the company has formed the layout of digital agriculture with soil as the entrance. According to the company announcement, in the first half of 2019, the revenue of the company's digital agriculture business sector has begun to appear, mainly from: 1) Saturas stem water potential sensor technology has been popularized in the domestic economic area. The technology comes from Israel Saturas, the company's shareholding subsidiary, and the company has the only priority cooperation right in the Chinese market; 2) the holding subsidiary Canada SoilOptix Rapid soil testing Service has been provided in Canada, the United States and other countries.
Clarify the coordinated development pattern of double business, and start again in the second half of the year with a new style!
On June 30, 2019, the company issued an announcement that the business related to fertilizer auxiliaries would be transferred to Fubon New Materials, a wholly-owned subsidiary. After the completion of the transfer, the company's business will be adjusted to a holding management platform with strategic planning, resource management and risk control as its main functions, and as a R & D and promotion platform with digital agriculture as the core. Manage the business sectors within the scope of the merger of the company. We believe that the company's re-carding of the line of business may help to improve the efficiency of the company's business coordination and improve the performance in the second half of the year.
Profit forecast and investment advice: we expect that from 2019 to 2021, the company will achieve a revenue of 7.2max 9.4 / 1.23 billion yuan and a net profit of 1.0120000 yuan. We are optimistic about the expansion of the company's overseas business and the acceleration of the commercialization of digital agriculture to maintain the "buy" rating.
Risk tips: cooperation progress is not as expected, raw material price fluctuation risk, intelligent fertilizer business progress is not as expected, overseas business expansion is not expected, the acquisition of subsidiary goodwill impairment risk.
