Anhui Guangxin Agrochemical (SH:603599) Great Wall Securities·2024-06-13 03:01Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% relative to the industry index in the next six months [1][36]. Core Views - The company is expected to see revenue growth in the coming years, with projected revenues of 71.57 billion, 86.92 billion, and 95.80 billion yuan for 2024, 2025, and 2026 respectively, reflecting year-on-year growth rates of 22.0%, 21.5%, and 10.2% [5][32]. - The report highlights the continuous growth in pesticide demand and the restructuring of supply dynamics, which are anticipated to drive pesticide prices back to reasonable levels [5][30]. - The company's ongoing extension of its industrial chain is expected to enhance product structure optimization and core competitiveness, positively impacting performance [5][15]. Financial Summary - In 2022, the company reported operating revenue of 9,062 million yuan, which is projected to decline to 5,868 million yuan in 2023, before recovering to 7,157 million yuan in 2024 [1][28]. - The net profit attributable to the parent company is expected to decrease from 2,316 million yuan in 2022 to 1,439 million yuan in 2023, with a further decline to 1,110 million yuan in 2024, before rebounding to 1,418 million yuan in 2025 and 1,822 million yuan in 2026 [1][5]. - The report indicates a significant drop in cash flow from operating activities, which is expected to recover in the following years, with net cash flow from operations projected at 2,600 million yuan in 2024 [17][28]. Industry Overview - The pesticide industry is currently facing a down cycle, with short-term performance pressures due to excess capacity and high inventory levels [30][38]. - Despite the current challenges, long-term demand for pesticides is expected to remain resilient, driven by increasing global population and the need for enhanced agricultural productivity [30][38]. - The report notes that the global pesticide market has grown from 35.575 billion USD in 2006 to 87.7 billion USD in 2022, with a compound annual growth rate of approximately 5.80% [30].