It is estimated that the net profit of homing in 2018 will drop by 19.2% compared with the same period last year.
According to the results released by KuaiBao, Kim Jong-da is expected to achieve revenue of 17.6 billion yuan in 2018, down 11.4% from the same period last year, 790 million yuan in operating profit, down 13.6% from the same period last year, and 578 million yuan in net profit, down 19.2% from the same period last year. Corresponding to EPS0.18 yuan, it is close to the lower limit of the previous performance forecast. The decline in the company's performance is mainly due to the depressed market of downstream agricultural products and sluggish market demand, which led to a decline in the company's sales of compound fertilizer and controlled-release fertilizer in 2018. At the same time, the company invested 200 million yuan in various promotion expenses on "pro-soil No. 1" in 4Q18, and its subsidiary, Jong Da of Germany, lost 100 million yuan from August to December, and the company's consolidated proportion expanded from 34.7% to 94%.
1~3Q18 has a revenue of 21.25 billion yuan and an annual income of 17.6 billion yuan, mainly due to the change of trade revenue from the original total method to the net method, resulting in a decline in overall income.
Pay attention to the main points
Be optimistic about the development of "pro-earth No. 1" and Jinfeng Commune. The company's "pro-soil No. 1" products are mainly aimed at cash crops, with a high gross profit margin. In order to accelerate the soil-friendly fertilizer market and brand promotion, the company has a large input cost. At present, the soil-friendly series products have a good performance in the greenhouse planting area market, and the sales of "soil-friendly No. 1" are expected to grow rapidly in the future. Jinfeng Commune provides all-round services for farmers by pooling the resources of the planting industry chain. In 2019, the No. 1 document of the Central Committee proposed to support the Agricultural Service Commune to carry out agricultural productive services such as land trusteeship, generation of ploughing and seed generation, which is good for the promotion and development of Jinfeng Commune. At present, the company has built 170 Jinfeng Commune at the county level, and the steady progress of Jinfeng Commune in the future will drive the growth of compound fertilizer sales.
Cooperate with JD.com to promote "Internet + Agriculture" and cooperate deeply around the whole industry chain of planting industry. The company and JD.com agreed to cooperate in seven aspects: Kim Jong-da product sales, JD.com farm project, agricultural research institute, agricultural finance, agricultural products sales, supply chain cooperation and user cooperation. The two sides will seize the strategic opportunity of rural revitalization to further build the future framework of modern agriculture from planting solutions, brand building and sales of agricultural products, supply chain to agricultural services, and agricultural big data, optimize the allocation of agricultural resources, and actively explore the development of "Internet + Agriculture", which will help to enhance the company's core competitiveness in the agricultural field and promote industrial transformation and upgrading.
Valuation and suggestion
Due to the low price of agricultural products affecting the demand for compound fertilizer, we lowered our annual profit forecast for 2018-19-20 by 11%, 18%, 18%, 18%, 18%, 0.18%, 0.25 and 0.31 yuan per share. Maintain the target price of 8.4 yuan, which is 7.4% higher than the current stock price, and the target price corresponds to the 2019 hit 20 33/27xP/E, maintaining the recommended rating.
Risk
The promotion progress of Jinfeng Commune is lower than expected, and the sales volume and price of compound fertilizer are lower than expected.
