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Limin Co. (002734): Interim report performance exceeds market expectations and cooperates with Weiyuan to build a comprehensive pesticide company

Limin Co. (002734): Interim report performance exceeds market expectations and cooperates with Weiyuan to build a comprehensive pesticide company

Event 1: On June 26, the company released a report on the implementation of major asset purchases and related transactions, announcing that Limin Shares, Xinrong Investment and Xinwei Investment had paid all of the transaction counterparties in accordance with the “Equity Transfer Agreement”The cash consideration totaled 480 million yuan, 200 million yuan and 7,855.

780,000 yuan; the target company has completed the transfer of equity and the replacement of directors, supervisors and senior management personnel; after the completion of the transaction, Limin Shares, Xinrong Investment, and Xinwei Investment each hold 60% of Weiyuan’s asset group, 25%, 15% equity; Limin shares hold Xinrong Investment 45.

33% of the shares, so Limin shares hold 71 equity interests in Weiyuan Asset Group.

3%.

  Event 2: On June 30, the company released the 2019 semi-annual performance forecast, and the net profit attributable to the mother in the first half of 20191.

96-2.

0.6 million yuan, an increase of 90-100% in ten years, of which the net profit attributable to the mother in the second quarter1.

13-1.

23 ppm, a year-on-year increase of 155-178%, the company’s performance growth rate exceeded expectations.

  The company completed the asset delivery and equity change of the target company. Weiyuan Asset Group officially became the holding subsidiary of Limin.

Weiyuan is a well-known enterprise in the industry. It has avermectin and avermectin in the pesticide field. It has glufosinate in continuous gas phase process in the herbicide field, and tiamulin and ivermectin in the veterinary medicine field.After the acquisition of Weiyuan, it can replace the company’s product gaps, optimize the product structure, and form a good complementary effect; Inner Mongolia Xinweiyuan has an area of about 1,000 acres in Dalat Banner, currently only using 300 acres, and it can be developed 淡水桑拿网 in the future.The space is huge.

  The downstream demand of the company’s main products is strong, and future project reserves are abundant.

The company’s new capacity of 1 free radical chlorothalonil and 1 inserted mancozeb will be put into production in the fourth quarter of 2018.

According to the data of Zhuochuang Information, the price of chlorothalonil increased from 50,000 / ton last year to 5 now.

5 million tons / ton, meanwhile, after the company ‘s bacteriobacter technology reformation, the average product quality and cost price have gradually become similar in-house enterprises, and the company has already entered into the long-term procurement business with Syngenta, which will provide the company’s future performance.Guarantee of stability.

  Investment suggestion: Regarding Weiyuan’s consolidation for the time being, we will increase the company’s 2019?
In 2021, the net profit of the main business will be 3.

25/4.

06/4.

660,000 yuan (original predictor 2018?
2020 return to mother net profit1.

96/2.

65/3.

29 ppm); Considering Weiyuan’s consolidation from June 2019, we expect the company to be in 2019?
Net profit attributable to mothers is 4 in 2021.

01/4.

69/5.

2.3 billion, corresponding to PE is 11, 9, and 8 times.

We believe that the company’s overall market value is significantly underestimated. We are optimistic about the company’s continued growth under the strong-strong joint model, maintain a “buy” rating, and continue to recommend it.

  Risk Warning: The construction progress of the new project is less than expected, the price of raw materials rises, the risk of safe production, and the risk of exchange rate changes.