28/03/2020

Limin (002734): Performance Forecast Exceeds Expectations, Acquisition of Weiyuan Synergistic Growth

Event: The company announced that the company completed the completion of the acquisition of Weiyuan’s equity on June 27; 2019 H1 is expected to achieve net profit attributable to the mother1.

96?
2.

9.6 billion, a 90% annual increase?
100%, more than expected.

Jiangsu Xinhe’s investment income increased, Weiyuan consolidated its performance: Reasons for the increase in performance 1) The investment income of the joint-stock company Jiangsu Xinhe increased. Jiangsu Xinhe completed 2 injection of chlorothalonil production capacity at the beginning of 2018 and reached the total production capacity in 2019.3 is the highest.

Syngenta proposes to gradually close the chlorothalonil production plant in the port of Houston in the United States and hedge against the European chlorothalonil ban. The price of chlorothalonil continues to run at a high level. Baichuan data shows that in the first half of 2019, the mainstream price of 100% chloroform is above 51,000 yuanIn April and May,武汉夜生活网 it surged to more than 57,000 yuan, an increase of nearly 30% compared with the same period last year. Supply continued to be tight. In 2019, the new capacity of Xinhe Company continued to improve its performance.

2) The company completed the Weiyuan asset group consolidation in June to bring in profit growth.

The price of mancozeb is stable, and ethylenediamine continues to decline and widen the spread: the company’s products have the largest production capacity and output in China, including carbamoxan, triethoxyaluminum, amine disulfide, and Weibaimu, with nearly 4The initial capacity is the domestic standard maker of mancozeb.

Demand for mancozeb is stable, product prices are high, and the mainstream pick-up price of 90% raw powder has been stable at around 21,500 yuan / ton for a long time. The main raw material ethylene diamine has been put into production to increase price pressure. The domestic mainstream ethylene diamine price is 14,500 yuan, creating a history.A new low, an earlier 2017 price high of 45%.

9%, Daisen-ethylenediamine spread continued to widen.

The new project’s production progress has accelerated, and the acquisition of Weiyuan has accelerated its growth: the company launched a 500-ton phenyl ether metrazol project at the end of 2018 and is expected to start production in the second half of 2019.

The Hebei subsidiary Shuangji 1 introduced Daisen series DF products and is expected to be put into production in the first half of 2019.

The company recently completed the acquisition of Weiyuan’s equity, Limin shares, Xinrong Investment, and Xinwei Investment each holding a share of Weiyuan’s asset group; the performance commitment is no less than 1 billion in 2019 net profit and no less than 2020 annual net profit1.

100 million, the net profit in 2021 is not less than 1.

200 million in 2019?
The total net profit for the three years to 2021 is not less than 3.

3 billion.

Weiyuan Company ‘s Abamectin series products have ranked first in China for many years in terms of market share and export value; Diflubenzuron products are exported to the top two domestically; glufosinate products are exported to the top three domestically; and fusion fungiester products are exported to the top five domestically.

The related acquisitions are expected to increase the performance by more than 100 million US dollars. At the same time, the two parties have complementary channel advantages, which is conducive to the collaborative development of the pesticide market.

Investment suggestion: Considering Weiyuan’s consolidation, the company’s EPS for 2019-2021 is expected to be 1.

54/1.

9/2.

19 yuan; maintain Buy-A rating, 6-month target price of 23.

0 yuan, corresponding to 15/12/10 times of PE.

Risk reminder: The prices of chlorothalonil and avermectin have fallen sharply, and the project has been put into production less than expected.