Xinyangfeng (000902): Internal performance has increased against the trend, high-quality leaders accelerate the increase of city share

Investment Highlights The company published its 18-year annual report and 19-year quarterly report, with an income of 100 in 18 years.

3.1 billion increased by 11.

05%, net profit attributable to mother 8.

1.9 billion increased by 20.

39%; 31Q1 income 31.

4 billion with a 9 increase.

38%, net profit attributable to mother 3.

3.9 billion increased by 20.

88%.

The performance in 18 years has grown steadily, and the growth momentum in 19Q1 has continued.

Preliminary phosphate and compound fertilizer sales were 440.

11Positive increase by 2.

74%.

1) In terms of phosphate fertilizer, the increase in compound fertilizer production and sales comes from the increase in consumption, resulting in a decrease in external sales growth7.

65%; 2) Sales of conventional compound fertilizers increased by 5.

67%, income increased by 19.

01%, accounting for 55.

85% increase by 3.

73pct; 3) Sales of new compound fertilizers increased by 12.

17%, income increased by 30.

54%, accounting for 13.

66% increase by 2.

04 points.

The product structure continued to be optimized and upgraded, and the proportion of high-margin products increased significantly, with a gross profit margin of 18.
.

36% increase by 0.

58pct, the profitability is constantly increasing.

In addition, due to the sharp decline in revenue from the trading business with a low gross profit margin, after excluding the impact of trading business revenue, the revenue growth rate of other main businesses was as high as 18.

46%.

After excluding the impact of trade income in 19Q1, the company expects compound fertilizer revenue to grow at 15% +, and the growth momentum will continue.

In addition, the 18-year dividend payout ratio is 31.

53%, considering having repurchased 1.

After 2.5 billion, dividends and repurchase combined accounted for 46% of net profit.

76% and at least 1.

The 7.5 billion repurchase quota reflects the company’s confidence in future development.

The first-tier dealers increased against the trend and the market share accelerated.

At the end of 18, there were 4,800 euros of first-tier agents, an increase of more than 300 from the end of 17 years, and nearly 70,000 terminal retailers, an increase of nearly 10,000 from the end of 17 years.

During the downturn in the compound fertilizer industry, the stage of the stock game, the company can still continue to expand the channel network and accelerate the increase of the city’s market share. It mainly benefits from the significant cost advantage under the integrated industry layout, so that there are a lot of channels to allow profit and overlap.Differentiated technical services, uniforms to accelerate the acquisition of high-quality dealer resources, the number of first-tier dealers increased against the trend.
As the company’s channel control capabilities continue to strengthen, it will play a role in driving growth in the future.
Overall, the number of distributors in the industry is expected to shrink by more than 20%, which means that a large number of small and medium-sized compound fertilizer companies have lost channels and markets, and the competition pattern between large-scale compound fertilizer companies and high-quality distributors will usher in improvement.

The quality of the report is excellent, and the effect of scale is further released.

In terms of expenses, the company’s 18-year sales expense ratio dropped 0 year-on-year.

12pct, mainly benefited from the brand advantage and the scale effect brought by the continuous expansion of the main industry.

The 18-year management expense rate has dropped by 0 every year.

16pct, reflecting the continuous optimization of the company’s internal operating system and improved efficiency.

In 1Q1, the total sales and management fee rate improved.

92pct, the scale effect is further released.

In terms of inventory, as the prices of 18Q3 phosphate ore and potash fertilizers remained relatively low, the company’s active reserves led to more inventories, and sales in 19Q1 were good, and the inventory was gradually digested.

In terms of cash flow, due to the sluggish urea price at the end of the year, compound fertilizer dealers were waiting and watching, which caused the spring season of compound fertilizer sales in 2019 to be delayed by nearly one month, and the company’s operating cash flow in 19Q1 exceeded 2.

500 million, dazzling performance.

The research and development and promotion of new fertilizers are accelerated to provide high value-added agrochemical services.

Focus on the development and promotion of high-end fertilizers.

In 18 years, R & D investment increased, and in collaboration with academician Zhang Fusuo, the leader of the special fertilizer discipline of the China Agricultural University, a key 重庆耍耍网 laboratory for crop special fertilizers was set up by the Ministry of Agriculture and Rural Affairs.New products are introduced, such as the introduction of high-margin shrimp and rice fertilizers, in line with the reduction in rice production and shrimp and rice farming trends.

At present, it has formed four major brands: “Yangfeng”, “Autel”, “Liseno” and “Lekaihuai”. Among them, the new brand “Liseno” focuses on high-end fertilizers and “Nuofeng” in cooperation with German Kangpu experts.For the promotion of Tektronix, Luo Wensheng, the former deputy general manager of Kim Jong Da, joined in and worked hard to promote a comprehensive breakthrough in the marketing end.

Liseno was established in February 19th and is expected to start contributing sales in Q2.

Increase the promotion of high value-added professional technical services.

The company has formed a “pyramid” system of agrochemical services: an expert advisory team consisting of academicians of the Chinese Academy of Engineering Yuan Longping, Zhang Fusuo, and professors of agricultural universities and top experts; a step-by-step agrochemical service team composed of vice president Dr. Xuemei Bao;The grassroots service team is formed to provide overall services, regional agrochemical services, soil testing formula fertilization guidance, customized products and other special services to establish the market image and level of the industry’s leading modern agricultural industry solution provider.

113 high-standard demonstration field bases were completed in 18 years, including 27 national-level demonstration fields, which will help increase sales of new-type fertilizers in 19 years.

Invested 1.2 billion in Yichang relocation project and optimized and upgraded production capacity.

The company invested US $ 1.2 billion in the Yichang relocation project in 19 years, upgrading some common monoammonium phosphate to industrial-grade monoammonium phosphate and ammonium polyphosphate, and invested in the construction of a comprehensive utilization project of phosphate rock.

Through advanced process equipment, comprehensive utilization of phosphogypsum and fluorine, it is in line with the sustainable green development direction of the fertilizer industry.

Considering the company’s abundant cash flow, it is expected to continue to invest in the construction of high-quality production capacity and continue to improve its product power.

Environmental rectification strengthens the cost advantage, the industry adjustment has come to an end, and high-quality leaders will continue to make efforts.

From the upstream point of view, since November 18, the environmental protection of monoammonium phosphate has been strengthened and the supply-side reform has been implemented, which will gradually and fully support the subsequent price trend.

From the perspective of the compound fertilizer industry, the transition from the levy in September 15 to the downturn in the industry was adjusted. At present, the price of agricultural products is at the bottom. The supply and demand layout has been improved through the reduction of planting areas such as corn. The prices of agricultural products have gradually recovered.The concentration of adjusted dealers and compound fertilizer companies has continued to increase, and the adjustment of the industry has come to an end.

In this context, the company has a capacity of 180 mg of monoammonium phosphate, and the cost-side advantage is more prominent. At the same time, the accumulated high-quality dealer resources will continue to develop, and future performance growth can be expected.

Earnings forecast and investment rating: As a white horse of agrochemical consumption, the company, based on the advantages of industrial chain integration, has higher product costs and good profitability of distributors. Therefore, the company’s historical performance has maintained steady growth.

The performance in 2018 once again fulfilled the growth logic of increasing market share and optimizing and upgrading the product structure. We are optimistic about the company’s sustainable growth. We expect the company to achieve 110 revenue in 19-21.

04/122.

81/136.

7.2 billion, an increase of 9.

7% / 11.

6% / 11.

3%; net profit attributable to mother 9.

92/12.

00/14.

4.2 billion, an increase of 21.

2% / 20.
9% / 20.
2%.

The current priority is 14.

2X / 11.

7X / 9.

8X, maintain “Buy” rating!

Risk warning: raw material prices fluctuate, environmental protection is not as expected