SAL(SH:603970) Haitong Securities·2024-06-13 11:31Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1][21]. Core Views - The company has shown a stable growth in its performance despite a decline in overall revenue due to a destocking phase in the domestic agrochemical market. The revenue for 2023 was 10,460 million yuan, a decrease of 10.59% year-on-year, while the net profit attributable to the parent company was 225 million yuan, reflecting a growth of 6.9% year-on-year [6][22]. - The company is expanding its international business, with a 20% increase in shipment volume, although sales revenue has declined due to falling product prices. The company is also piloting C-end business in Argentina to enhance its global operational capabilities [20]. - The company has formed strategic partnerships with Yangnong Chemical and Qingyuan Crop Science to leverage its channel advantages in the agrochemical distribution sector [8]. Financial Performance Summary - In Q1 2024, the company achieved an operating revenue of 2,397 million yuan, a year-on-year increase of 2.32%, and a net profit of 54 million yuan, up 7.5% year-on-year. The gross margin was 6.94%, a slight decrease of 0.01 percentage points [7]. - The sales of pesticide formulations maintained growth, with revenue from pesticide formulations reaching 6,016 million yuan, a year-on-year increase of 11.49%. The sales of crop nutrition products saw a significant increase of over 100% [7]. - The company expects revenue growth rates for its pesticide distribution business to be 8%, 13%, and 13% from 2024 to 2026, while the agricultural machinery business is projected to grow at 10% during the same period [10]. Earnings Forecast - The forecast for net profit attributable to the parent company is 254 million yuan in 2024, 296 million yuan in 2025, and 344 million yuan in 2026. The estimated P/E ratio for 2024 is between 22-25 times, corresponding to a reasonable value range of 20.90-23.75 yuan per share [21][22].