Yangnong Chemical (600486): Performance in line with expectations Focus on the company’s asset restructuring progress and growth
Event: Yangnong Chemical released the 2019 semi-annual report with a total operating income of 28 in the first half of the year.
94 ‰, ten years ago 6.
49%, net profit is 6.
29 ppm, an increase of 11 years.
46%, the basic EPS is 2.
02 yuan, sales gross margin is 34.
79%, with an average ROE of 13.
Corresponding to the second quarter operating income13.
24 ppm, molecular weight 15 ring.
67%, net profit 3.
00 ppm, a molecular weight of 8.
81%, deducting non-net profit is 2.
8.2 billion, compared with 6 formaldehyde.
Performance was basically in line with expectations.
The decrease in operating income in the first half of the year was mainly due to the increase in sales of wheat straw shrinking. In the first half of 2019, the sales revenue of herbicides6.
410,000 yuan, an average of 49 in ten years.
Increasing prices of insecticide doses and increasing incomes have offset the replacement of herbicide performance. In the first half of 2019, pesticide sales revenue18.
12 ppm, an increase of 21 in ten years.
43%, with an average sales price of 23.
08 million yuan / ton, an increase of 11 in ten years.
Income from other businesses 4.
4杭州夜生活网1 trillion, an increase of 33 in ten years.
Net profit in the first half was 6.
29 trillion, the best semi-annual performance since listing.
The price of pyrethroid has improved, and the dicamba business is still to be resumed, and the domestic business is expected to become a new bright spot.
The current prices of kungfuthrin and bifenthrin were 300,300,000 / ton, respectively, which have been improved earlier, but are still at historical highs.
The business of dicamba is still to be resumed. The gradual increase in the amount of dicamba-resistant genetically modified crops in the downstream of the transition will increase the amount of dicamba and reduce the inventory. It is necessary to pay attention to the demand for dicamba in the second half of the year.
The long molecular weight of the company’s permethrin is expected to increase in 19 years, and the price of short orders will decrease, affecting some of the company’s profits.
The company reported that it strengthened synergy with the sales of Sinochem crop preparations, and domestic pesticide sales increased by 55.
5%, Sinochem’s internal pesticide business has seen synergies. 3.
Pay attention to the company’s asset restructuring and growth.
The company intends to transfer 100% equity of Sinochem Crops and Shenyang Agricultural Research in cash.
The company is expected to transform from an original drug manufacturer to an integrated industrial chain pesticide business management platform that integrates research, production and sales. The industrial chain, variety, R & D resources, sales network and customers are complementary to each other with significant synergistic effects.
The acquisition of Baoye Chemical will enrich the company’s pesticide varieties and land resources.
The company’s Rudong Phase III, pesticide preparation and other projects will become the company’s endogenous increase in the next few years.
Earnings forecast, investment rating, and revised estimates: The price of pyrethroids has decreased, and the sales of dicamba have fallen. We have lowered our profit forecast for 19-21, and expect a net profit of 19-21.
2.5 billion, EPS is 3.
28 yuan, according to estimates of comparable companies, giving 18 times PE in 2019, reducing the target price to 63.
00 yuan, maintain “Buy” rating.
Risk reminders: production safety risk, product price decline risk, downstream demand weakening risk, raw material price risk, dicamba-tolerant genetically modified crop promotion does not meet expectations, Sino-US trade dispute risk, exchange rate fluctuation risk.