Event: the company released its quarterly report for 2021, with revenue of 218 million yuan (year-on-year + 9.37%) and net profit of 52 million yuan (year-on-year-42.38%, month-on-month + 20.69%).
Q1 performance improved month-on-month, product market supply and demand and prices returned to a reasonable range: the return of the company's BIT and F-nitrile prices led to a decline in 2021Q1 performance compared with the same period last year, but Q1 performance growth was driven by the increase in industrial fungicide sales and gross profit margin of 2020Q4 Company. According to the announcement, 2021Q1's sales of industrial fungicides increased by 32.83% compared with the same period last year and 14.46% compared with 2020Q4. The prices of CIT/MIT, MIT, OIT, DCOIT and BIT 2021Q1 in industrial fungicides changed year-on-year / month-on-year-6.06%, + 50.67%, 30.28%, + 7.52%, 9.85%,-0.17%, 16.50%,-75.67%, 5.91%, respectively. The impact of the Xiangshui 321 accident gradually faded, the relationship between supply and demand in the market tended to stabilize, and the prices of BIT series products with large increases in 2019 returned to a reasonable range. The company's industrial fungicide business fluctuated sharply and returned to the track of steady growth. 2021Q1 gross profit margin 45.38%, month-on-month growth 4.36 pct, due to the implementation of the new revenue guidelines, freight and other expenses originally included in sales expenses are included in the cost of the main business, and the year-on-year change of gross profit margin is not for reference.
The new production capacity of Pine Wood Island Phase III is expected to be completed by the end of 2021, and the leading position of the industry will be further strengthened:
According to the announcement, the company has developed into the largest manufacturer of isothiazolinone industrial fungicides in Asia. After the initial public offering project reached production in 2019, the company's annual production capacity of fungicides exceeded 30,000 tons. The third phase of the industrial fungicide project of Matsujima Branch will start in 2020, with plans to add 12000 tons of CIT/MIT or 2000 tons of MIT, 2500 tons of BIT, 1200 tons of OIT or 600tons of DCOIT. The project construction period is 24 months, and is expected to be completed by the end of 2021. At that time, the company's total industrial fungicide production capacity will exceed 40,000 tons, and the global market share will further increase after it is put into production.
The announcement of the equity incentive plan will help the company to maintain a healthy development track: the company issued a restricted stock incentive plan for 2021 (draft), which is proposed to grant 5.82 million restricted shares (2.23% of the company's total share capital) at a price of 7.36 yuan per share. the total number of incentive targets is 64 people. It includes directors, senior managers, middle managers and core staff of the company (including subsidiaries). The company has set a performance target for this incentive plan based on net profit in 2020, with a net profit growth rate of not less than 30%, 60% and 90% respectively from 2021 to 2023, and determines the proportion of its lifting restrictions according to the evaluation results of the incentive objectives. the company that fails to meet the target will cancel the repurchase of restricted shares that cannot be lifted.
Investment suggestion: the company's net profit from 2021 to 2023 is expected to be 290 million yuan, 360 million yuan and 440 million yuan respectively, corresponding to 12, 10 and 8 times of PE.
Risk tips: product price fluctuations, lower-than-expected demand and so on.