Lier Chemical (002258): The price of glufosinate is expected to stabilize and focus on the company’s long-term value

Lier Chemical (002258): The price of glufosinate is expected to stabilize and focus on the company’s long-term value

Event: Lier Chemical released its 2019 performance report, with a ten-year operating income of 41.

64 ppm, a 10-year increase3.

40%, net profit is 3.

11 ‰, 46 years average.

14%, previous EPS was 0.

59 yuan, corresponding to the fourth quarter of 2019 operating income11.

40 ‰, a decrease of 9 per year.

09%, an increase of 17.

28%, net profit is 0.

7.7 billion, 重庆耍耍网down 51 every year.

57%, an increase of 2 from the previous month.

84%.

Comments: 1.

The preliminary results are related to the decline in prices of glufosinal, the main product.

Global agricultural product prices are at a low level, and the global agrochemical industry is still in a downturn, but the company’s operating income has continued to grow slightly, hitting a new annual revenue since listing.

Affected by the new production capacity of glufosinate formaldehyde, the price of glufosinate, the company’s main product, continued to decline in 2019, and the price of glufosinate was 15 at the end of 2018.

800,000 yuan / ton dropped to 110,000 yuan / ton at the end of 2019, a decrease of 30.

38%, dragging down company performance.

2.

The company’s MDP process is mature, and the company’s cost advantage is obvious.

The company’s existing 11,000 tons of glufosinate production capacity ranks second in the world. The Guang’an base also has a 7,000 tons / year glufosinate project plan. In the future, the company will become the world’s first glufosinate production capacity.

On December 25, 2019, the company announced that Guang’an Lier, a subsidiary of the company, is expected to suspend production for three months, optimize the glufosinate production process, and achieve the integration with the methyl phosphorous dichloride (MDP) project, marking the company’s phosphorus trichloride andThe process for the inorganic synthesis of methylphosphine dichloride is becoming mature, which can realize large-scale stable and safe production.

Based on the independently developed phosphorus trichloride-Strecker reaction process of Guang’an Lier, the cost is significantly lower than that of the Grignard reaction method. The company continues to lead the domestic counterparts in terms of technology and cost.

The mature MDP process has also laid a solid foundation for the construction of 7,000 tons of glufosinaldehyde in Guang’an base.

3.

Initial demand for glufosinate cations is expected, and prices are expected to stabilize.

As the price of glufosinate decreases, the economical efficiency of glufosinate for paraquat and glyphosate substitutes, and the promotion of glufosinate-resistant transgenic crops, the demand for glufosinate will gradually increase.

Guang’an Lier ceased production, and the supply of glufosinate will fluctuate slightly, which will give support to the current glufosinate market, and the price of glufosinate will try to stabilize and rise.

4.

The company established a subsidiary with Cody, which is beneficial to the company’s long-term development.

Cody Huawei’s Dow-DuPont Agricultural Division expands. Dow Agrotech has long-term cooperation with the company in chlorinated carbide pesticides. The subsidiary was established to continue the cooperation between the two parties and bring more supplementary projects for the company, which will help the company’s long-termdevelopment of.
Profit forecast and investment advice: Considering the decline in the price of the company’s glufosinate phosphate, we revise down the 20-year profit forecast, supplement the 21-year profit forecast, and predict that the company’s net profit will be 4 in 20-21.

68, 5.

98 trillion, corresponding to 0 EPS.

武汉夜生活 89, 1.

14 yuan, downgraded to “overweight” level.

Risk reminder: technical progress of refined glufosinate cations, lower glufosinate prices, safe production, environmental protection, fluctuations in raw material prices, convertible debt raised capital investment projects are not up to expectations, exchange rates and other risks.