20230424-国金证券-扬农化工-600486.SH-原材料回落_新项目推动成长_4页_874kb

Earnings Summary for 2023 Q1

The company reported its 2023 first-quarter financial results, showing a revenue decline of 14.58% year-over-year and a net profit decrease of 16.59% year-over-year. Despite this, the performance slightly exceeded market expectations due to factors such as stable raw material prices and improved margins. Key metrics included adjusted EBIT and EPS, reflecting moderate profitability amid market challenges.

Business Analysis

Raw material costs for the company's core chemicals, like acetic acid and others, saw declines, contributing to higher gross margins. By business segment:

• The original drug business faced a significant revenue drop of 98.8% YoY, attributed to lower prices and volumes, with prices falling by 8.32% and sales volume decreasing by 17.6%.
• In contrast, the制剂 business showed strong growth with a 58.6% revenue increase YoY, driven by a 122.4% volume hike despite price declines of 5.96%. The company's new investment project in Liaoning, focusing on producing various pesticides and chemicals, is expected to generate substantial revenue and profit margins, potentially adding over 4.3 billion in revenue and 600 million in net profit by full capacity.

Financial Projections and Valuation

Based on forecasts, the company's net profit is expected to grow steadily from 1,952 billion in 2023 to 2,557 billion by 2025, with EPS ranging from 630 to 825 yuan. Current valuation metrics include high P/E ratios decreasing from 1,455x in 2023 to 1,111x in 2025. The company maintains an "买入" (Buy) rating with a target price reflecting upside potential, while highlighting risks such as volatility in product and raw material prices as well as uncertainty in new project timelines.

Risks and Company Context

Key risks include potential downward trends in product prices, significant raw material price fluctuations, and delays in the execution of new facilities. Historical data indicates strong growth in revenue and profits over recent years, with projected continued expansion through 2025. The company's ROE and other financial metrics show moderate improvement, supported by asset growth and efficient operations.

Outlook and Recommendations

The investment outlook is positive for future growth, driven by the new project and diversification efforts, though investors should monitor market uncertainties. Overall, performance is underpinned by strategic investments in innovation and capacity expansion.