Guangxin Co., Ltd. (603599): Fine Chemicals Business with Growth Performance in Accordance with Expectations is a Bright Spot

Guangxin Co., Ltd. (603599): Fine Chemicals Business with Growth Performance in Accordance with Expectations is a Bright Spot

Revenue and performance growth are in line with expectations.

The company released its 2018 annual report and 2019 first quarter report, and achieved revenue of 28 in 2018.

4.7 billion (+21.

35%), net profit attributable to mother4.

6.9 billion (+39.

09%), equivalent to EPS 1.

25 yuan, an increase of 38 each year.

89% of which, in the fourth quarter, achieved revenue of 5 in a single quarter.

9.3 billion (+12.

74%), net profit attributable to mother 0.

9.4 billion (+82.

72%); revenue in the first quarter of 20198.

900,000 yuan (+17.

38%), net profit attributable to mother 1.

3.5 billion (+20.

27%), the company’s performance growth in line with market expectations.

High gross profit fine chemical intermediates have become a new growth point.

In terms of the company’s product structure, in 2018, the business of fungicides, herbicides and fine chemical intermediates respectively achieved revenue7.

6.7 billion (-17.

44%), 12.

7.2 billion (+24.

46%), 7.

900,000 yuan (+100.

51%); the average price is 33504 yuan / ton (+7.

72%), 24,468 yuan / ton (+19.

46%), 101200 yuan / ton (+111.

45%), the overall gross profit margin increased by 2.

78 pcs to 36.

09%, net interest rate increased by 2.

11% to 16.

48%; the proportion of fine chemical intermediate business revenue has increased significantly and has become the main growth point of the company’s performance. This is mainly due to the development strategy of the company’s entire industrial chain layout. It can independently support upstream key intermediates, which not only guaranteesThe supply of original medicines has reduced production costs. At the same time, in order to meet the needs of some customers, the company actively develops horizontally and develops intermediate series products, among which high-margin varieties such as chloroformate, isocyanate, and urethane have been put into production., The company’s profitability has further improved.

The fund-raising projects are distributed throughout the industry chain to further enhance product competitiveness.

The company’s investment projects have gradually extended to the upstream of the industrial chain, including 20-terminal nitrosochlorobenzene and 1.

5 The chemical modification of o-xylylenediamine establishes the entire industrial chain layout, further reducing product costs and widening the gap between segments; after the Xiangshui explosion in Jiangsu, the necessity of the integration of the pesticide industrial chain has increased, and the entire industrial chain layoutConducive to the company’s stable supply of raw materials and intermediates, meanwhile, the company will also benefit from the potential price increase under the impact of current environmental protection and safety production;武汉夜网论坛 gradually expand the industrial chain, replace new fungicides such as pyraclostrobin, and cultivate newThe performance increase point of the project is expected to be completed in the second half of 2019, and the company’s performance will be significantly increased after reaching production; the company’s book cash exceeds 20 billion, and the asset-liability ratio is only 21%.The land reserve is sufficient and the potential for future growth is great.

Earnings forecast: What do we expect the company to do in 2019?
The net profit attributable to mothers will be 5 in 2021.

92/7.

61/8.
8.2 billion, an increase of 26 each year.
1%, 28.

7%, 15.

8%, corresponding EPS is 1.

27/1.

64/1.

90 yuan.

The current price is 18.

16 yuan, corresponding to 14 times PE in 2019, maintain “Buy” rating.

Risk reminder: The construction progress of the fundraising investment project is less than expected, the new product market is developing less than expected, the price of raw materials changes, the risk of safe production, and the risk of exchange rate changes.