Xinyangfeng (000902) Annual Report Comments: Steady Growth in Compound Fertilizer Sales and Optimized Product Structure

Xinyangfeng (000902) Annual Report Comments: Steady Growth in Compound Fertilizer Sales and Optimized Product Structure

Investment Highlights: Event: Xinyangfeng Announces 2018 and 2019 Q1 Results: It achieved operating income of 100 in 2018.

310,000 yuan, a year-on-year increase of 11%, net profit attributed to mother 8.

190,000 yuan, a year-on-year increase of 20%, corresponding to 0 EPS.

61 yuan, in line with expectations; operating income of 31 in the first quarter of 2019.

4 billion, a year-on-year increase of 9%, and net profit attributed to mothers3.

390,000 yuan, a year-on-year increase of 21%, corresponding to 0 EPS.

25 yuan, in line with expectations.

The company intends to distribute a cash dividend of 0%.

2 yuan / share (including tax).

Sales of compound fertilizers continued to increase, and product structure was continuously optimized and upgraded.

In 2018, the company’s compound fertilizer revenue was 7 billion yuan, an increase of 21% year-on-year, and the 南宁桑拿 total sales volume was 331, an increase of 6% year-on-year.

Among them, the revenue of conventional compound fertilizers was 5.6 billion yuan, an increase of 19% year-on-year, and the sales volume was 276 euros, an increase of 6% year-on-year.

The proportion of new compound fertilizer income in total compound fertilizer income increased to 20%.

We think that the company’s new fertilizer ratio has a lot of room for improvement and is optimistic about the future 5?
10 years gradually increased to about 50%.

Cost advantage to build and operate a moat.

As a domestic leader in phosphate and compound fertilizer industry and a leader in crop-specific fertilizers, the company extends the industry chain up and down and continues to improve its integrated layout.

With the advantages of industrial chain integration and location logistics, it has created a huge cost advantage in the industry.

We conservatively estimate that the company’s monoammonium phosphate is self-sufficient, the price advantage of imported potassium fertilizers, and the logistics advantages brought by the geographical layout of the compound fertilizer cost advantages of the three aspects of about 165 yuan / ton, the comprehensive cost advantage is expected to be nearly 200 yuan / ton.

Accelerate the expansion of marketing channels and increase market share.

The company ‘s leading peers have a huge cost advantage to distribute channels, obtain high-quality dealer resources, increase channel stickiness, and increase market share. When the compound fertilizer industry recovers in the future, Xinyangfeng has the greatest flexibility in sales growth.

The company has 29 sales branches across the country, with more than 1,000 marketing staff, more than 4,800 first-tier dealers, and nearly 70,000 terminal retailers, a significant improvement over the same period last year, and in some cases the networkThe most densely distributed and most professional marketing team.

Earnings forecast and investment grade: What do we expect the company to do in 2019?
Net profit in 2021 will be 9.

6.5 billion, 11.

4.9 billion, 13.

73 trillion, EPS is 0.

72 yuan, 0.

86 yuan, 1.

03 yuan.

The current corresponding P / E is 15 times, 13 times, and 10 times, respectively.

Maintain target price of 15 yuan, there is 40% space from the current price.

Maintain the “Highly Recommended” rating.

Risk reminders: the price of agricultural products will decline; the price of phosphate fertilizers and compound fertilizers will decline;