Event: the company issued a semi-annual performance forecast for 2022, and it is expected to achieve a net profit of 194 million yuan to 230 million yuan in the first half of 2022 (compared with the same period last year).
The rise in product prices promotes performance growth, and the commissioning of the third phase of the project will contribute to a certain increase: according to the announcement, the company's performance growth in the first half of 2022 is mainly due to an increase in the sales prices of some products compared with the same period last year.
The net profit of 2022Q1 is 98 million yuan, and the estimated net profit of 2022Q2 is 0.96 billion yuan, which is 84.7% higher than that of the same period last year. The company's total production and sales of 2022Q1 industrial fungicides were 8930.94 tons and 7312.38 tons respectively, with year-on-year changes of + 4.3% and-25.2% respectively; product prices increased year-on-year, especially CIT/MIT and BIT series products, with year-on-year / month-on-month changes of + 58.65% and + 98.75% respectively. 2022Q1 gross profit margin is 59.44%, 12.75 pct higher than in 2021. The construction of the third phase of the Pine Mudao Branch project was completed in 2021 and was put into trial production in September 2021. The process of capacity increase is in line with expectations. The new capacity of 12000 tons of CIT/MIT or 2000 tons of MIT, 2500 tons of BIT, 2500 tons of OIT1200 or 600tons of DCOIT will provide performance increments in 2022.
The original production capacity of isothiazolinone industrial fungicides is the largest in Asia, and it continues to develop downstream formula products: according to the announcement, after the third phase of Pine Island was put into production, the company currently has an original pharmaceutical production capacity of more than 40,000 tons per year. It is the largest producer of isothiazolinone industrial fungicides in China and even in Asia. It has established a stable long-term cooperative relationship with the core customers of downstream sterilization and anti-mildew services, such as Langsheng Chemical, Oshada, Troy and so on. At the same time, the company also continues to try the downstream formulation products of industrial fungicides. At present, the technology and channels of industrial fungicide formulation products worldwide are mainly in the hands of a small number of international chemical giants. According to the announcement, the company has developed more than 50 kinds of formula products, of which more than 30 kinds of products are being sold.
Plan to sell loss-making assets to improve capital utilization efficiency: according to the announcement, the company intends to sell 100% stake in Shenyang Baiao, a subsidiary, to Kay Shenglong. Shenyang Baiao mainly produces FNitrile, the main raw material of fungicide BIT series products, with a net profit loss of 42.11 million yuan in 2021 and a loss of 7.37 million yuan in 2022Q1. The sale of shares in Shenyang Baiao subsidiary will help the company to focus on its main business, optimize its business and management structure, and improve the efficiency of its capital and resource utilization.
Investment suggestion: the company's net profit from 2022 to 2024 is expected to be 410 million, 450 million and 510 million yuan respectively, corresponding to 9.2,8.4,7.5 times of PE.
Risk tips: raw material price fluctuations, lower-than-expected demand and so on.