XACIG(SH:600596) Tebon Securities·2025-08-28 08:16Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company, Xin'an Chemical, is positioned as a dual leader in glyphosate and organosilicon, with expectations for performance improvement under the backdrop of national policies emphasizing anti-involution [5][8]. - The company has a comprehensive business model that integrates crop protection, silicon-based new materials, and new energy materials, leveraging its unique "chlorosilicon-phosphorus" circular economy model [12][5]. - The glyphosate market is expected to see a turning point due to demand recovery and supply disruptions, with the company benefiting from its global market presence and production capacity [5][18]. - The organosilicon sector is anticipated to undergo structural changes in demand, with the company poised to benefit from the end of the expansion cycle and a shift towards high-end applications [5][33]. Summary by Sections 1. Company Overview - Xin'an Chemical was established in 1965 and has developed a strong presence in the agricultural chemicals and organosilicon sectors, with a focus on a full-chain integration model in crop protection [12][5]. - The company has a complete industrial chain from upstream silicon mining to downstream product manufacturing, with applications in various industries including electronics and transportation [12][5]. 2. Glyphosate and Organosilicon Market Dynamics - Glyphosate is the world's leading herbicide, with a significant market share, and the company has a production capacity of 80,000 tons per year [5][18]. - The demand for glyphosate is expected to increase due to the growing adoption of genetically modified crops, particularly in China, which is projected to enhance market demand significantly [20][22]. - The organosilicon market is experiencing a shift in demand structure, with the company focusing on high-end applications and innovations in terminal products [5][36]. 3. Financial Projections - The company is projected to see substantial growth in net profit from 388 million yuan in 2025 to 957 million yuan by 2027, reflecting a compound annual growth rate of 653.9% and 36.7% respectively [8][7]. - Earnings per share (EPS) are expected to rise from 0.29 yuan in 2025 to 0.71 yuan in 2027, indicating strong profitability potential [8][7]. 4. Market Position and Competitive Landscape - The glyphosate industry is characterized by high concentration, with the company holding a 10% market share in China, benefiting from a favorable supply-side environment [23][26]. - The organosilicon industry is seeing a consolidation of production capacity among leading firms, with the company positioned to capitalize on this trend due to its cost advantages and integrated operations [40][43].