Limin shares (002734): Q1 results increase by 30-45%, continue to be bullish 60% in the next year to maintain buy

Limin shares (002734): Q1 results increase by 30-45%, continue to be bullish 60% in the next year to maintain “buy”

Event: The company announced the announcement of the pre-increasing results for the first quarter of 2019. The net profit attributable to shareholders of the listed company was 76.31-8511 million yuan, an increase of 30% to 45%.increase.

Viewpoint: The performance exceeded market expectations and continued to grow rapidly.

The company’s first-quarter performance is in line with the 80 million yuan expected by our developing countries, which is higher than market expectations.

Main factors: 1) The profit of Xinhe Agrochemical Co., Ltd., where the company has a 34% stake, soared. Xinhe Chloride benefited from the suspension of production of Syngenta and Japan’s SDS abroad. The production of domestic Suli and Viyunat increased.The economy is high, Xinhe added in October of 2018, and in January and November, it quickly reached full production. The production capacity increased from 2 to 3, and the price rose from 5 million tons / ton at the beginning of 18 to 5.

50,000 tons / ton.

2) The company’s Daisen system and mesotrione increased in profit.

The supply of corn-specific herbicide mesotrione was tight, and the price rose from 16 million / ton at the beginning of 18 to 24 million / ton. Mancozeb was still facing competition from Indian manufacturers in terms of price, and the price remained at 20,000-2.

2 trillion / ton range, but after the acquisition of Shuangji, the advantages in channels and preparations gradually emerged, while benefiting from the price of ethylenediamine, the main raw material, from the beginning of 18 2.

560,000 / ton initially fell to 1.

450,000 yuan / ton, profitability increased.

The main products have continued their high prosperity, and the next three years will be a period of rapid release of production capacity.

Company 1’s final generation of manganese zinc new capacity has been completed at the end of 18. It is expected to be put 重庆耍耍网 into production in the second quarter of 19, positioning the high-end product market of Daisen; the current demand for chlorothalonil market can only be met by Xinhe, and the production capacity will be based on the current three aspects.500 tons of anisole and metronidazole have begun construction and will be put into operation in Q3 of 19; Mesotrione is extremely tight in supply, and the capacity will be gradually expanded from 1,000 tons to 3,000 tons starting in 19; European grape fungicide triethylAluminum phosphate production capacity will be expanded from 5,000 tons to 1.

2 nominal.

Relying on leading technology and environmental protection advantages, and the acquisition of nearly 1,000 acres of parks in Weiyuan, the company’s production capacity in the next three 都市夜网 years will drive rapid growth in performance.

The acquisition of Weiyuan is expected to be consolidated in Q2, positioning it as the future leader in the pesticide industry.

Company with cash 7.

Acquired 100% equity of Weiyuan Biochemical for 5.9 billion US dollars. Weiyuan is a domestic superior company of avermectin, glufosinate, and fumagillol. The strong combination of the two will bring significant synergistic effects.

It is expected that the merger and consolidation will be completed in Q2 of 19, at which time the company will leap to the top five in the industry.

Weiyuan executive holding platform Xinwei Investment holds a 15% stake in Weiyuan and promises that the net profit for 2019-2021 will be no less than 100 million, 1.

100 million, 1.

200000000.

Considering that the company will repurchase Xinwei equity in the future, and that Weiyuan ‘s capacity potential and channel advantage potential are far from being released, Weiyuan ‘s performance is expected to show optimistic performance.

Maintain “Buy” rating.

The company’s 19-20 net profit is expected to be 2 respectively.

9.5 billion, 3.

9.6 billion yuan, with an EPS of 1.

05 yuan, 1.

42 yuan, PE is 13 times, 9 times.

If calculated based on Weiyuan’s post-consolidation performance, the company’s 19-year estimate is less than 10 times.

Give the company 15 times PE after the completion of the acquisition, with a target market value of 6 billion yuan and a target price of 21 yuan in the next year, up 60%, and maintain a “buy”.

Risk Warning: Risks of less-than-expected release of increased production capacity.