Yangnong Chemical (600486) 2018 Annual Report Review: Chrysanthemum Continues New Business in Orderly Progress

Yangnong Chemical (600486) 2018 Annual Report Review: Chrysanthemum Continues New Business in Orderly Progress

Event: Yangnong Chemical released its 2018 annual report: internal operating income 52.

910,000 yuan, a year-on-year increase of 19%, net profit attributed to mother 8.

950,000 yuan, an increase of 56% year-on-year, corresponding to an EPS of 2.

89 yuan, in line with expectations.

Among them, the fourth quarter of a single quarter achieved operating income9.

460,000 yuan, a year-on-year increase of 27%, net profit attributed to the mother1.

09 million yuan, -35% year-on-year, the corresponding EPS is 0.

35 yuan.

The company intends to distribute a cash dividend of 0%.

87 yuan / share (including tax).

Permethrin continued its high prosperity and the integrated leader fully benefited.

The company’s pesticide business revenue for 2018 was 26.

50 ppm year-on-year + 39%, of which sales volume + 11% year-on-year, and price + 25% year-on-year; benefiting from the increase in price of pyrethroid products, the gross profit margin of the pesticide business increased.

6 ppt to 33%.

At present, the market price of the company’s main agricultural pyrethroid products has remained high. Due to the suspension of production by some manufacturers in the industry, supply has continued to be tight. As the only pyrethroid manufacturer in the industry with complete industrial chain supporting, the company is expected to take full advantage of product price increases.

The long-term demand outlook for dicamba is good.

Due to the impact of trade friction between China and the United States, some 北京spa会所 herbicides in 3Q18 are rushing to export, resulting in changes in the sales of 4Q18’s herbicide products.%.
With the expansion of dicamba-resistant genetically modified crops in South America and the restoration of cultivation of GM crops in North America, demand for dicamba is expected to continue to grow in the medium and long term.

The project construction progressed in an orderly manner, supporting the steady growth of the company’s performance.

The third-phase project of Youjia has progressed steadily, the fourth-phase project has been followed up quickly, and the company’s product layout has been continuously optimized.

The commissioning of Youjia Terminal and warehousing project is also being promoted. At the same time, the company starts the preparation project construction at the same time to support the company’s 四川成都耍耍论坛 long-term development.

The company intends to acquire Sinochem crops and agricultural research company, which will further enhance the core value of the company’s “research, production and sales” industrial chain.

As an important pesticide listing platform of Sinochem itself, the company may have the opportunity to integrate high-quality agrochemical assets within the group in the future.

Earnings forecast and investment grade: What do we expect the company to do in 2019?
Net profit in 2021 will be 11.

02 billion, 13.

51 ppm, 17.

1.8 billion, with EPS of 3.

56 yuan, 4.

36 yuan, 5.

54 yuan.

The current corresponding P / E is 16 times, 13 times, and 10 times, respectively.

Maintain the “Highly Recommended” rating.

Risk warning: product prices fall; project construction progress is less than expected.