I. Overview of events

We recently investigated Qianjiang Biochemistry and communicated with the company's executives about the company's performance. The company is currently one of the largest biopesticide manufacturers in China.

II. Analysis and judgment

The improvement in performance in the past 13 years is mainly due to the improvement of production efficiency after the completion of the construction of the third branch plant.

After the closure of the second branch of the company, the company has carried out supporting construction on the production line of the third branch. At present, the overall fermentation capacity is fixed, with more than 3000 cubic meters of fermentation tonnage. After the completion of the supporting technical transformation of the third branch plant, the production capacity has now reached about 85% of that before the closure of the second branch plant, the production level and production efficiency have been improved, and the company's profits have improved. The third branch plant now has very little available land for construction, and its production capacity will not be expanded in the short term. The fourth quarter and the first quarter are relatively slow seasons for the company.

The income of pesticide products is stable

The company is one of the largest domestic producers of gibberellin, accounting for about 50% of sales revenue. Due to technical barriers and environmental protection, some small factories have been closed, prices have increased slightly this year, and the market has grown steadily in the future. the improvement of the company's production level and production efficiency determines the profit level; due to the decline of alternative products and rice acreage, the overall market of Jinggangmycin goes down, accounting for several percent of the company's income. Avermectin due to the impact of sericulture production, the company has not produced raw drugs, procurement of raw materials for preparation production, accounting for a small proportion of sales revenue.

Veterinary drugs affected by bird flu have declined this year.

Veterinary drug sulfur adhesive is a feed additive, which is mainly used for the prevention and treatment of animal diseases. Affected by bird flu, the veterinary drug market has fluctuated greatly in recent years and rebounded last year. At present, pig farming and other industries are in the doldrums, and the product is expected to be basically flat this year.

The competition between compound T and pharmaceutical intermediates is becoming more and more fierce.

Mainly pharmaceutical intermediates, eventually used in hormone drugs, accounting for more than 10% of the income. At present, the number of manufacturers has increased, the competition has become fierce, and the gross profit margin has dropped slightly. At present, it is less than 20%, and the income has increased slightly.

The holding or shareholding subsidiaries of the companies with improved performance in 2013 include optoelectronics, real estate, biochemistry, thermoelectricity and other industries. The improvement in performance in 2013 is mainly due to the improvement in the profitability of the company's main products, the decline in expenses and the increase in investment income.

Third, profit forecast and investment suggestions

The company is expected to give cautious recommendation rating for the first time in 13-15 year EPS0.07, 0.11,0.14 yuan.

Risk hint: insufficient production capacity.