2021-10-27Li Ji and Ren Jie of Debon Securities Co., Ltd. conducted research on Lier Chemical and released a research report "2021 Third QuarterLy Report Review: Suspension of Production Drags Down Q3 Performance, Optimistic About the Continuation of the High Prosperity of Glufosinate", this report gives a buy rating to Lier Chemical, and the current stock price is 23.59 yuan.
Lille Chemistry (002258)
Event: On October 25, the company released the third quarter report of 2021, and in the first three quarters of 2021, the company achieved operating income of 4.280 billion yuan, an increase of 27.37% year-on-year; and achieved a net profit attributable to the mother of 612 million yuan, an increase of 46.77% year-on-year. Among them, 2021Q3 achieved operating income of 1.120 billion yuan, an increase of 10.78% year-on-year; net profit attributable to the mother was 107 million yuan, a year-on-year decrease of 33.87%.
The suspension of production at the Mianyang base has led to a decline in Q3 profits, and production has been gradually resumed, and the performance will improve month-on-month. In 2021Q3, the company achieved a net profit attributable to the mother of 107 million yuan, a year-on-year decrease of 33.87%; deducting a non-attributable net profit of 102 million yuan, a year-on-year decrease of 34.20%. The main reason is that in July 2021, the Mianyang Emergency Management Bureau issued the "Decision on On-site Treatment Measures" to the company, and the company's Mianyang production base temporarily stopped production. As of the end of September, the rectification of hidden dangers in some of the company's production lines has passed the acceptance of the local regulatory departments, some production lines have resumed production, and other production lines are also expected to gradually resume production. Mianyang base as the company's production headquarters, the company's performance contributed greatly, with the steady progress of the resumption of production in Mianyang base, the company's performance is expected to be significantly improved.
The glufosinate industry continues to be booming, and the company continues to benefit as a global leader. According to Zhuo Chuang information data, the current average price of glufosinate phosphine raw drugs is 375,000 yuan / ton, a record high in the past 6 years, up 118.7% from the beginning of the year (171,500 yuan / ton). In recent years, with the improvement of the penetration rate of genetically modified crops, the implementation of paraquat and glyphosate ban policies, and the promotion and application of phosphine pyrafurium/glyphosate compound products, the demand for glumonium glufossine is expected to further increase. At present, the supply side continues to be tight, and it is expected that the price of glufosinate will rise further. At present, the company's glufosinate production capacity is 15400 tons / year, of which the Mianyang base is 8400 tons / year, the Guang'an base is planned to be 10000 tons / year, and has been put into production 7000 tons / year, the total production capacity ranks first in the world. The company's key intermediates MDP and phosphine glufosinate parallel project have been officially put into production, which will further consolidate the cost moat.
Forward-looking layout L-phosphonium glufosinate, long-term growth in the future can be expected. L-glufosdinium phosphine herbicide activity is twice that of ordinary glufosinate, the cost of administration is basically the same, the development and production of L-glumonium glufosinate will greatly reduce the amount of original drug. At present, there are only 4 domestic enterprises with L-oxalium phosphonium original drug registration certificate, including Lier Chemical, Japan Meiji Fruit, Yongnong Biological and Shandong Luba, and the company has also registered the liquid agent of refined ammonium phosphine sodium salt and refined oxalium phosphonium salt. The company plans to build 30,000 tons / year and 3,000 tons / year L-glumonium phosphine in Mianyang base and Guang'an base respectively, of which the 3,000 tons / year production capacity of Guang'an base is expected to be put into operation in 2022.
Investment advice: It is expected that the company's earnings per share in 2021-2023 will be 2.03, 2.26 and 2.55 yuan respectively, corresponding to PE of 12, 11 and 10 times, respectively, while referring to the current average PE level of the SW pesticide sector of 24 times, considering the company as the global leader of glumonium glufosinate, the scale and cost advantages continue to increase, while expanding new products horizontally, the performance is expected to continue to grow, maintaining the "buy" rating.
Risk warning: the production of new projects is less than expected; the risk of raw material price fluctuations; the risk of production safety accidents.
A total of 15 institutions have given ratings in the last 90 days, 11 buy ratings and 4 overweight ratings; the average target price of institutions in the past 90 days has been 38.57; the Securities Star Valuation Analysis Tool shows that Lier Chemical (002258) good company rating is 2.5 stars, good price rating is 3 stars, and valuation comprehensive rating is 3 stars.