LMGF(002734) 国海证券·2024-11-01 12:47Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [2][10]. Core Insights - The company's core pesticide products have seen price increases, contributing to a significant improvement in profitability in Q3 compared to the previous year [2][4]. - Despite a downturn in the pesticide industry, the company reported a net profit of 0.19 billion yuan in Q3, a year-on-year increase of 154.77% [3][9]. - The company has engaged in strategic partnerships to enhance its research and development capabilities in synthetic biology and biopesticides [5]. Financial Performance Summary - For the first three quarters of 2024, the company achieved a revenue of 3.344 billion yuan, a year-on-year decrease of 1.58%, while the net profit attributable to shareholders was 0.051 billion yuan, an increase of 132.76% [2][9]. - In Q3 alone, the company reported a revenue of 1.046 billion yuan, down 4.19% year-on-year and 20.03% quarter-on-quarter, but the net profit showed a remarkable increase [3][9]. - The gross margin for Q3 was 18.35%, up 3.90 percentage points year-on-year, indicating improved cost management [3][9]. Price Trends and Market Position - The company raised prices for its core products by 5-10% in September and October 2024, which has positively impacted its financial performance [4]. - As of October 30, 2024, the market prices for key products such as Bacillus subtilis and Abamectin have increased by 16.66% and 8.71% respectively compared to Q3 averages [4]. Future Earnings Forecast - The company is projected to achieve revenues of 4.2 billion yuan in 2024, with net profits expected to reach 0.85 billion yuan, reflecting a recovery in the pesticide industry [10][12]. - The expected price-to-earnings ratios for 2024, 2025, and 2026 are 34, 21, and 14 respectively, indicating a favorable valuation outlook as the market share is anticipated to grow [10][12].