Comparing sales growth of compound fertilizers, performance is expected to improve substantially in 2018

Westdollar.com April 18, 2018 00:00 Industrial Securities Xu Liuming, Huang Yandong View PDF original

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Kim Jung-ta (002470) #summary#

Event: Jin Zhengda released its 2017 annual report. During the reporting period, it achieved operating income of 19.833 billion yuan, an increase of 5.86%; net profit attributable to shareholders of listed companies was 715 million yuan, a year-on-year decrease of 29.64%; and the non-performing net of shareholders attributable to listed companies was realized. The profit was RMB 660 million, a decrease of 32.09% year-on-year.

In 2017, the company achieved a total fertilizer production of 6,692,200 tons, an increase of 12.69% year-on-year, and an annual sales of 6,892,100 tons of fertilizer, an increase of 11.57%.

The Company's performance forecast disclosed that the net profit attributable to shareholders of listed companies in the first quarter of 2018 ranged from RMB 519 million to RMB 560 million, an increase of 25% to 35% over the same period of the previous year.

Maintain "buy" investment rating. Affected by a sluggish market for agricultural products and rising prices of raw materials, Jin Zhengda’s 2017 performance declined year-on-year.

Jin Zhengda is one of the leading companies in China's compound fertilizers, and it has gradually formed a product pattern consisting of ordinary compound fertilizers, slow-release fertilizers, and soil conditioners. The company actively deployed the global market, acquired Germany's Kangpu Gardening, Dutch Holland, and other companies, and continuously improved its competitiveness and international reputation. More importantly, under the background of zero growth in the fertilizer industry, the company has cooperated with international financial companies, focused on agricultural services, built the Jinfeng commune model, entered the vast agricultural service market, and opened up vast development space. We adjust the EPS of the company from 2018 to 2019 to be 0.38, 0.45 yuan, and the expected value of 2020 EPS is 0.59 yuan, maintaining the investment rating of “buy”.

Risk Warning: The risk of a continuing downturn in the compound fertilizer market; Risk of sharp fluctuations in raw material prices.

Jin Zhengda's important data at a glance
Kim Jong Da Fundamental Data
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  • Total capital of 3.158 billion shares
  • Circulating stocks 2.586 billion shares
  • Earnings per share 0.23 yuan
  • Undistributed profit per share 1.48 yuan
  • Net assets per share 2.98 yuan
  • Return on net assets 7.81%
  • Net profit 71549.94 million
  • Net profit growth rate -29.64%
Jin Zhengda Investment Rating
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Overall rating within one month
Overall rating in March
Statistical period Buy Increase holdings neutral Reduction Sell total
Within one month310004
Within three months630009
Within six months8500013
Within a year17900026
Kim Jong-ta profit forecast
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2016A 2017E 2018E 2019E
Earnings per share (yuan) 0.32 0.23 0.38 0.48
Net profit (100 million yuan) 10.17 7.17 11.87 15.06
name Quote change Research report number Institutional investment rating (nearly six months)
Buy Increase holdings neutral Reduction Sell
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Stanley 0.15% 1 1 0 0 0 0
Chengxing shares 0.00% 0 0 0 0 0 0
Sichuan Meifeng 0.00% 0 0 0 0 0 0
Red sun -0.34% 4 3 1 0 0 0
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