SAL(SH:603970) Tianfeng Securities·2024-06-25 00:30Investment Rating - The report gives a "Buy" rating for the company, with a target price of 30 CNY based on a 25x PE for 2025 [64]. Core Viewpoints - The company is positioned as the only publicly listed pesticide distribution platform under the supply and marketing cooperative system, which enhances its uniqueness and growth potential in the agricultural sector [64]. - The company is actively expanding its domestic and international business, focusing on the synergistic development of pesticides and seeds, which is expected to improve its overall risk resistance [55][64]. - The company has established a comprehensive global pesticide supply platform, collaborating with leading domestic and international manufacturers, and has a strong product resource base [49][50]. Financial Analysis - The company's revenue from pesticide distribution in 2023 was 10,409.62 million CNY, accounting for 99.51% of total revenue [8]. - The forecast for 2024-2026 indicates revenues of 11,610.67 million CNY, 13,205.60 million CNY, and 15,586.17 million CNY respectively, with a projected net profit of 250.44 million CNY, 317.60 million CNY, and 422.10 million CNY [41][68]. - The gross profit margin is expected to improve from 7.38% in 2023 to 7.84% in 2026 [41]. Business Model - The company employs a dual procurement strategy for raw materials and intermediates, ensuring quality through a selective supplier list [7]. - It has established a "one-stop" chemical product supply platform, integrating upstream resources to provide comprehensive services to downstream manufacturers [7]. - The company is expanding its overseas market presence, with operations in over 90 countries and regions, and has a strong focus on product registration in key markets [49][50]. Research and Development - The company emphasizes "Technology Leading Agriculture," focusing on enhancing R&D capabilities in green pesticide formulations, and has obtained several national patents [4]. - Collaborations with leading agricultural research institutions and companies are aimed at improving pesticide application technology and product quality [4]. Market Position - The company is a leader in the pesticide distribution sector in China, with a well-established network and strong partnerships with major industry players [17]. - The integration of seed and pesticide businesses is expected to create a synergistic effect, enhancing the company's competitive edge in the market [8][55].