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苏利股份(603585):估值底部已现 静待花开

Suli Co., Ltd. (603585): The bottom of the valuation is now waiting to blossom

國聯證券 ·  Apr 28, 2020 00:00  · Researches

Events:

The company publishes its annual report in 2019 and quarterly report in 2020. In 2019, the operating income was 1.813 billion yuan, an increase of 10.0% over the same period last year, and the net profit returned to the mother was 303 million yuan, a decrease of 2.86% over the same period last year. In the first quarter of 2020, the operating income was 323 million yuan, down 26.95% from the same period last year, and the net profit was 39.1271 million yuan, down 51.02% from the same period last year. A cash dividend of 6 yuan is paid out for every 10 shares.

Main points of investment:

19 years of operation in line with expectations, pesticide and flame retardant business steady development of the company's crude drug and preparation business cumulative sales of 21000 tons in 2019, basically the same as the same period last year, achieving income of 1.143 billion yuan, + 10.45%, gross profit margin of 45.04%, year-on-year-7.61pct, the decline in gross profit margin is mainly due to the excessive increase in the price of raw materials. The cumulative sales of the flame retardant business was 9700 tons, basically the same as the same period last year, with an income of 419 million yuan, + 7.86% year-on-year, 26.11% gross profit margin and + 1.58pct year-on-year. The cost during the period of the company is 179 million yuan, which is + 5.8% compared with the same period last year.

The epidemic superimposed natural disasters, and the company's performance declined in the first quarter.

Affected by COVID-19 's epidemic situation, the company extended the time to resume work and production, and due to the recovery of domestic logistics and supplier production at that time, the company's production and business activities gradually returned to the normal level in late February 2020. In addition, the droughts in South America and floods in North America in 2019 have overstocked some channels and affected the company's product sales. The company's two main businesses declined in the first quarter of 2020, including cumulative sales of pesticides and preparations of 3379.5 tons, year-on-year-40%, and flame retardants and intermediates of 1702.4 tons,-29.2% of the same period last year.

The reserve of the new project is rich, and the company pays close attention to the new production capacity of decabromodiphenylethane. the company has been engaged in the production and sale of pesticides and flame retardants for a long time, and all the main products have relatively perfect self-supporting supply capacity of intermediates. After years of development, the company has formed a scale advantage in chlorothalonil and decabromodiphenyl ethane. From the point of view of the projects under construction in the company, many new projects have yet to be completed and put into production, of which the Baili Chemical Project with an annual output of 15000 tons of decabromodiphenyl ethane has completed all the civil construction and installation, and will enter the joint trial operation phase in the first quarter of 2020 and start production in the second quarter of 2020; the project with an annual production of 1000 tons of acetamidoxime and an annual production of 5000 tons of brominated polystyrene is expected to be completed by December 31, 2020. In addition, the technical renovation project with an annual output of 9000 tons of pesticide preparation products will be completed on January 31, 2020.

Ningxia project is pregnant with great development potential, and the first phase of construction has started smoothly. Suli Ningxia is the core of the company's strategic development plan. The successful construction of the project and achieving production and efficiency as planned are the basis for the company's further development. From the point of view of project planning, Suli Ningxia will build a project with an annual output of 424100 tons of fine chemical products and related derivative products, which as a whole continues the company's production advantages in gasification ammoxidation process and gasification chlorination process. Around agricultural fungicides to build the integrated production capacity of key intermediates-crude drugs-preparations, the project will be divided into three phases: the first phase of the construction of chlorothalonil, isophthalonitrile and other production equipment and supporting facilities. Construction started in March 2020. The second phase of the construction of benzofuranone, high-temperature plasma and other production and supporting facilities; the third phase of the construction of piperazine pyrophosphate, enylmorpholine and other production and supporting auxiliary facilities. The total investment is expected to be 3.04 billion yuan, and the total net profit after the completion of the project is 1.14 billion yuan, which is 4-5 times the profit level of the existing production scale.

Profit forecast and rating

Affected by the epidemic and the weather, the company's production and sales of crude drugs and preparations in the first half of the year are under pressure, so we downgrade this year's annual performance forecast. Without considering the contribution of Ningxia project, the net profit of homing from 2020 to 2022 is expected to be 225 million yuan, 256 million yuan and 305 million yuan, respectively, corresponding to 15 times, 13 times and 11 times of PE, respectively. The overall valuation level is lower than the industry average. Combined with the company's extremely low asset-liability ratio and abundant cash flow, maintain the company's "recommended" rating.

Risk hint

Ningxia project construction is not as expected; global epidemic continues to spread; extreme weather disasters occur frequently.

The translation is provided by third-party software.


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