1. The global leader in chemical fertilizer auxiliaries industry, overseas layout wants to create a "Fubon"
The company is the leading enterprise in the global fertilizer auxiliaries industry. Since the launch of the Action Plan for Zero growth of Chemical Fertilizer use from 2015 to 2020, in order to cope with the changes in the demand of the downstream chemical fertilizer production industry, the company 1) innovate the PSC model to enhance competition barriers: continuous innovation and differentiation in products; continuous growth in production to ensure low inventory; sales to form a community of interests with customers, and establish a stable cooperative relationship with a number of leading enterprises Research and development has invested heavily to ensure the company's ability to innovate; 2) continue to expand overseas markets: the company has opened the African market through cooperation with Morocco's OCP Fertilizer Group in digital agriculture and fertilizer auxiliaries; integrated the northern and southern European markets through the acquisition of Novi Kay of the Netherlands and France's PST,; and enhanced its profitability in Southeast Asia by providing new products. In 2018, the company's overseas revenue exceeded domestic revenue for the first time.
two。 Take soil as the entrance to lay out digital agriculture and purchase agricultural "cool techs" around the world.
The company began to make efforts in the field of digital agriculture in 2016 and decided to take digital agriculture as its development strategy in 2018. At present, through the global agricultural "cool techs" acquisition, the company has formed a digital agricultural layout with soil as the entrance, which is mainly composed of three aspects: 1) take soil detection as the entrance, build the agricultural Internet of things through SoilOptix soil detection technology, improve the efficiency of soil data acquisition, and help the new model of soil improvement. 2) taking intelligent fertilizer dispensing as export, based on SoilOptix soil detection technology, combined with intelligent fertilizer dispensing machine, Tian er App and new fertilizers to build a new agricultural material supply model to effectively improve crop yield; 3) with precision irrigation as an assistant, Saturas stem water potential sensor optimizes fertilization management to help crops grow, improve quality and increase yield.
3. Join hands with Hoda Science and Technology to create a new agricultural service model to help the company open the second pole of growth!
Hoda Technology is the digital agricultural technology development platform of Fubon Holdings. Relying on the agricultural "cool techs" acquired by Fubon shares, it has constructed an intelligent agricultural service platform to help Fubon shares dig deep into the needs of the planting chain. To create an innovative model of "one platform, two ports, three services", that is, an ecological operation platform for planting industry, with soil big data as the entrance and intelligent fertilizer distribution as the export, three service modes are provided. Including 1) the "7-11" model based on mom-and-pop shops, 2) the "MUJI" model aimed at high-end items, and 3) serving the government, helping one county, one product, accurate poverty alleviation and rural revitalization. The acceleration of the commercial application of Heda science and technology in digital agriculture will directly improve the performance of Fubon shares, which is expected to form a new pillar of the company's performance after chemical fertilizer auxiliaries.
4. Profit forecast, valuation and investment advice
We estimate that from 2019 to 2021, the company will achieve a revenue of 7.2 million yuan and a net profit of 1.5 / 230 million yuan with a revenue of 9.4 billion yuan and a net profit of 1.23 billion yuan. It corresponds to 0.35 EPS 0.52 pound 0.80 yuan. We are optimistic about the expansion of the company's overseas business and the acceleration of the commercialization of digital agriculture. The company's PEG=1, in 2019 will be 35 times PE in 2020, with a target price of 18.20 yuan, maintaining a "buy" rating.
Risk tips: 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.
