Yangnong Chemical(600486) 光大证券·2024-03-25 16:00Investment Rating - The report maintains a "Buy" rating for the company [3][7]. Core Views - The company's performance in 2023 was under pressure due to a 27.41% year-on-year decline in revenue to 11.478 billion yuan and a 12.77% decrease in net profit attributable to shareholders, amounting to 1.565 billion yuan [2][3]. - The decline in revenue and profit was attributed to inventory destocking and falling prices of key products such as glyphosate and pyrethroids [2]. - The company is accelerating the construction of the Liaoning Youchuang project, which is expected to enhance production capacity and product variety, providing new growth opportunities [2][3]. Summary by Sections Financial Performance - In 2023, the company's raw material and formulation business revenues were 7.384 billion yuan and 1.676 billion yuan, respectively, reflecting year-on-year decreases of 22.20% and 1.22% [2]. - The average selling prices for raw materials and formulations fell by 29.55% and 3.50%, respectively, in 2023 [2]. - The company reported a fourth-quarter revenue of 2.204 billion yuan, down 18.63% year-on-year, but net profit increased by 31.09% to 204 million yuan [2]. Project Development - The Liaoning Youchuang project plans to produce 15,650 tons of pesticide raw materials and 7,000 tons of intermediates, with a total investment of 4.248 billion yuan, expected to generate annual revenue of 4.083 billion yuan upon completion [2]. - As of the end of 2023, the company's construction in progress amounted to 1.294 billion yuan, a 214.83% increase from the end of 2022, primarily due to increased investment in the first phase of the Liaoning Youchuang project [2]. Profit Forecast and Valuation - The profit forecasts for 2024, 2025, and 2026 are adjusted to 1.766 billion yuan (down 6.4%), 2.034 billion yuan (down 0.4%), and 2.318 billion yuan, respectively [3]. - The ongoing development of the Liaoning Youchuang project is expected to broaden the company's capacity and product range, contributing to future growth [3].