Yangnong Chemical(600486)2024-10-30 12:20Investment Rating - The report maintains a "Strong Buy" rating for Yangnong Chemical (600486) with a target price of 74.34 CNY per share, compared to the current price of 60.25 CNY [1][2]. Core Views - The company achieved a positive year-on-year profit growth in Q3 2024, with the successful rollout of the Youchuang project contributing to this performance [1][2]. - Despite a decline in revenue of 13.57% year-on-year for the first three quarters of 2024, the company reported a net profit of 10.26 billion CNY, down 24.61% year-on-year [1]. - The report highlights that the company's raw material business saw a revenue increase of 4.11% year-on-year in Q3 2024, while the formulation business experienced a significant decline [2]. Financial Summary - For Q3 2024, Yangnong Chemical reported revenues of 23.17 billion CNY, with a year-on-year increase of 4.98% but a quarter-on-quarter decrease of 8.16% [1]. - The company's raw material sales volume reached 26,100 tons in Q3 2024, reflecting a year-on-year increase of 11.68% [2]. - The average price of raw materials in Q3 2024 was 57,400 CNY per ton, showing a year-on-year decrease of 6.78% [2]. Future Projections - The report forecasts net profits for Yangnong Chemical to be 14.16 billion CNY, 16.81 billion CNY, and 19.49 billion CNY for the years 2024, 2025, and 2026 respectively [2]. - The expected revenue growth rates for the upcoming years are projected at 33.1% for 2024, 16.2% for 2025, and 13.6% for 2026 [3]. Market Position - The report emphasizes the company's strong market position and its ability to adapt to changing procurement patterns in the agricultural sector, which is shifting towards smaller, more frequent orders [2]. - The successful implementation of the Youchuang project is expected to enhance the company's performance and contribute to revenue growth in the coming years [2].