Yangnong Chemical(600486) 华创证券·2024-03-26 16:00Investment Rating - The report maintains a "Strong Buy" rating for Yangnong Chemical, expecting it to outperform the benchmark index by over 20% in the next six months [1][13]. Core Views - Yangnong Chemical's 2023 annual report shows a revenue of 11.478 billion yuan, down 27.41% year-on-year, and a net profit attributable to shareholders of 1.565 billion yuan, down 12.77% year-on-year. The company plans to distribute a cash dividend of 0.88 yuan per share, totaling 358 million yuan, with a payout ratio of 22.85% [1]. - The company demonstrated strong sales capabilities despite a decline in pesticide prices, achieving a 10.43% increase in raw material sales volume and a 2.36% increase in formulation sales volume. However, revenue from raw materials fell by 22.20% to 7.383 billion yuan, and formulation revenue decreased by 1.22% to 1.676 billion yuan [1]. - The report highlights the beginning of a destocking cycle in the Northern Hemisphere, with expectations for a recovery in the pesticide cycle in the second half of 2024, benefiting Yangnong Chemical as a leading player in the industry [1]. - The company is rapidly advancing its Youchuang and Youjia projects, with expected sales to the Sinochem system amounting to 5.459 billion yuan in 2024, a year-on-year increase of 85.66%, which will support the digestion of new project capacities [1]. Financial Summary - For 2023, Yangnong Chemical reported total revenue of 11.478 billion yuan, with a year-on-year growth rate of -27.4%. The net profit attributable to shareholders was 1.565 billion yuan, with a year-on-year growth rate of -12.8% [2]. - The projected financials for 2024 to 2026 indicate a recovery, with expected revenues of 15.667 billion yuan in 2024 (36.5% growth), 18.297 billion yuan in 2025 (16.8% growth), and 20.675 billion yuan in 2026 (13.0% growth) [2]. - The earnings per share (EPS) are projected to increase from 3.85 yuan in 2023 to 4.21 yuan in 2024, 5.13 yuan in 2025, and 5.70 yuan in 2026 [2].