Yangnong Chemical(SH:600486) EBSCN·2024-08-27 09:10Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company's performance is under pressure due to declining pesticide prices, with a significant drop in revenue and net profit in the first half of 2024 compared to the previous year [2][3] - The company is progressing well with its YouChuang project, which has entered trial production, potentially expanding its capacity and product range [3] Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 5.699 billion yuan, a year-on-year decrease of 19.4%, and a net profit attributable to shareholders of 763 million yuan, down 32.1% [2] - In Q2 2024, the company reported revenue of 2.523 billion yuan, a decrease of 1.7% year-on-year and 20.6% quarter-on-quarter, with a net profit of 334 million yuan, down 9.6% year-on-year and 22.2% quarter-on-quarter [2] Business Segments - The raw material business generated revenue of 3.323 billion yuan, down 26.4% year-on-year, with sales volume of 50,000 tons, a decrease of 3.3% [3] - The formulation business reported revenue of 1.204 billion yuan, down 10.0% year-on-year, with sales volume of 28,000 tons, a decrease of 1.7% [3] Project Development - The YouChuang project in Huludao is planned to produce 15,650 tons of pesticide raw materials and 7,000 tons of pesticide intermediates annually, with a total investment of 4.248 billion yuan [3] - As of June 2024, the project has entered trial production, with significant construction progress reported [3] Profit Forecast and Valuation - Due to ongoing challenges in the pesticide industry and price declines, the profit forecasts for 2024-2026 have been adjusted downwards, with expected net profits of 1.285 billion yuan (down 27.2%), 1.590 billion yuan (down 21.9%), and 1.928 billion yuan (down 16.8%) respectively [3]