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ADAMA A (000553) 2019 First Quarter Results Preview Comment: Performance Meets Expectations Environmental Policy Helps Leading Enterprise Development

2020-03-18

ADAMA A (000553) 2019 First Quarter Results Preview Comment: Performance Meets Expectations Environmental Policy Helps Leading Enterprise Development

Event: On April 15th, the company released the 2019 first quarter performance forecast.

Net profit for the first quarter is expected to be between RMB 338 million and RMB 391 million, and it will decrease by 80 in the future.

70% -83.

40%, with a projected basic budget benefit of zero.

1381 yuan-0.

1602 yuan.

Comments: (1) Affected by non-operating profit and loss, net profit improved in the first quarter. The company expects that net profit in the first quarter will decrease by 80 compared with the same period in 2018.

70% -83.

40%.

15 were acquired by Syngenta.

The impact of one-time net income of US $ 7.3 billion, the net profit of the first quarter of 2018 landed significantly, and the amortization of intangible assets increased by 54 million yuan from the first transaction to the first quarter of 2019.

After excluding such effects, the net profit in the first quarter of 2018 was 5.

330,000 yuan, the adjusted net profit for the first quarter of 2019 is 5.

09 to 5.

63 trillion, is expected to be flat with the first quarter of last year.

(3) The prices of products in multiple regions rose, and the first-quarter performance was the same as last year.

In the first quarter, there were many unfavorable factors such as the suspension of production at the old factory in Jingzhou, the severe cold winter in North America, and the duration of global supply of primary medicines.

At present, the old factory area of Jingzhou Base is gradually resuming operations. The old factory area has been connected with sewage treatment facilities in the new factory area using the most advanced technology through pipelines.

The Air Force was affected by the suspension of production in the old factory area, and the company’s output declined, incurring about 7杭州夜网论坛0 million yuan in suspension costs.

(3) Environmental protection policies have become stricter. Leading companies have benefited from the continuous occurrence of chemical accidents and the implementation of the national budget bill for the pesticide industry. The overall management of the pesticide and chemical industry has become stricter.Inventories are tightening, pesticide supply is tight, and pesticide prices are generally on the rise.

At the same time, the introduction of environmental governance policies and measures has also further improved the entry-level biology of pesticide companies, optimized the industrial structure, and transformed competition among enterprises, thereby benefiting the leading companies in the pesticide industry with better environmental governance.As an industry leader, wheat will fully benefit and its market share is expected to further increase.

Profit forecast and investment recommendations: Adopting stricter environmental protection policies, improving the prosperity of the agrochemical industry, the company will gradually benefit as a leading company. We maintain the company’s profit forecast for 19-21, and expect the net profit to be returned to the parent company in 19-21They are 16.

90, 20.

35, 22.

28 ppm, EPS is 0.

69, 0.

83, 0.

91 yuan, maintaining a target price of 17.

46 yuan, maintain “Buy” rating.

Risk factors: The recovery of the global agrochemical industry is less than expected, the company’s performance after mergers and acquisitions is less than expected, and exchange rate fluctuation risks.