Yangnong Chemical(SH:600486) Huaxin Securities·2024-08-28 09:01Investment Rating - The report maintains a "Buy" rating for Yangnong Chemical (600486.SH) [2][4] Core Views - The pesticide industry is experiencing a downturn, but the company demonstrates resilience against risks [2] - In H1 2024, the company reported revenue of 5.699 billion yuan, a year-on-year decrease of 19.36%, and a net profit attributable to shareholders of 763 million yuan, down 32.10% [2] - The company is advancing its projects, with the Huludao project entering trial production [3] Summary by Sections Industry Overview - The pesticide industry is facing increased competition and market differentiation due to global oversupply [2] - Factors such as geopolitical issues, shipping disruptions, extreme weather, and adverse market conditions have led to a decline in product prices and sales volume [2] Financial Performance - In H1 2024, the average sales price for raw materials and formulations was 66,500 yuan and 42,900 yuan, respectively, down 23.91% and 8.39% year-on-year [2] - The company achieved production of 49,300 tons of raw materials and 24,000 tons of formulations, with sales of 50,000 tons and 28,100 tons, reflecting a decline in revenue of 26.4% and 9.95% respectively [2] Cost Management - The company benefited from a decrease in raw material prices, with liquid alkali, liquid potassium, potassium carbonate, and hydrobromic acid prices dropping by 14.8%, 27.9%, 22.9%, and 40.1% respectively [2] - Cost control measures led to savings of 226 million yuan in H1 2024, mitigating the impact of price declines [2] Project Development - The company is focused on deep integration within the industry, with significant investment in the Huludao project, totaling 520 million yuan in fixed asset investment in H1 2024 [3] - The first phase of the large-scale fine chemical project has entered trial production, with the second phase's infrastructure nearing completion [3] Earnings Forecast - The forecasted EPS for 2024, 2025, and 2026 is 4.12 yuan, 4.86 yuan, and 5.67 yuan respectively, with corresponding PE ratios of 11.8, 10.0, and 8.6 [4]