Yangnong Chemical Co., Ltd. (600486): The acquisition plan exceeded expectations and enhanced R & D capabilities. Rich sales channels

Yangnong Chemical Co., Ltd. (600486): The acquisition plan exceeded expectations and enhanced R & D capabilities. Rich sales channels

Event: The company announced a report on the purchase of major assets and related transactions. The company intends to purchase 100% equity of Sinochem Crops and 100% equity of Agricultural Research Corporation from Sinochem International through cash payment at a transaction consideration of 9.

1.3 billion yuan.

Sinochem crops return to mother’s net profit for 18 years1.

160,000 yuan, 18 years of agricultural research company net profit attributable to mothers-27.14 million, of which a total of 8930.

550,000 四川耍耍网 yuan, the purchase price corresponds to 18 years of net profit PE10.

22 times; Sinochem’s 18-year net assets6.

1.2 billion yuan, the net assets of agricultural research company -1.

1.2 billion US dollars, each totaling 500 million US dollars, the purchase price corresponds to 18 years of net assets PB1.

83 times.

The counterparty promised to acquire the target company’s net profit from deductions to non-mother totaled 2 in 19-21.

9.7 billion yuan.

The merger and acquisition will improve the research of the production and marketing industry chain and create an integrated platform for Sinochem’s international pesticide business and management.

The agricultural research company has a complete new pesticide creation system, a national pesticide engineering center, and the only national key laboratory for new pesticide creation and development in China. Sinochem Crops has established domestic and overseas pesticide product sales and product service platforms for agricultural use.Chemicals is a production-oriented enterprise. After the reorganization is completed, the company will integrate the core assets of Sinochem International’s pesticide business to form a more complete industrial chain integrating research, production and sales. Through R & D resources and sales networksEffective integration of products and complementary advantages of customers, give full play to synergies and expand market share.

With the successive completion of large-scale mergers and acquisitions by six global agrochemical giants, the “three-legged” agrochemical industry pattern of the United States, the European Union and China has been formed.

Gradually improve and develop gradually. Among them, China Chemical Group, which is involved in the pesticide industry, is restructuring with Sinochem after acquiring Syngenta.

The company, as an integrated platform for pesticide business and management within the Sinochem International System, is expected to benefit from it.

Rudong Phase III and Phase IV are expected to start production gradually next year, and growth will become the company’s future mainstream.

The company plans Rudong Phase III, Phase IV and Phase 3.

26 pesticide preparation projects.

The investment amount of Rudong Phase III is 20.

2.2 billion yuan, expected to achieve income 15 after reaching production.

4.1 billion, net profit3.

7.2 billion yuan; investment in Rudong Phase 4

3 billion yuan, with an estimated income of 10.

2.3 billion, net profit1.

2.8 billion yuan; 3.

26 Investment amount of pesticide preparation project 2.

2 billion yuan, with an expected income of 6.

2.5 billion, with a net profit of 72.73 million yuan.

The company basically did not increase the release of production capacity in 19 years, and it is estimated to be suppressed. The gradual release of production capacity next year will continue the growth path of the company.

Maintain “Highly Recommended-A” investment rating.

Recently, oil prices and pesticide demand have decreased, and pesticide companies are estimated to continue to reduce.

However, pesticides are just needed, long-term demand is stable, and the trend of increasing concentration of pesticide industry leaders is also quite certain.

As a Sinopec-related pesticide business platform, the company has leading domestic R & D and engineering capabilities, and strives to continue to develop in the future.

Taking into account the merger and acquisition, the company’s net profit attributable to its parent in 2019-2021 is expected to be 11 respectively.

7.7 billion, 14.

1.2 billion and 17.

1.7 billion, corresponding 苏州夜网论坛 to 14 times, 12 times and 9 times the corresponding PE, maintaining the “strongly recommended-A” level. Risk warning: Downstream demand is less than expected; risk of policy uncertainty leading to slower capacity building.