Yangnong Chemical (600486) Commentary on Major Issues: M & A Plan Issued to Integrate Industry Chain to Accelerate Company Development

按摩

Yangnong Chemical (600486) Commentary on Major Issues: M & A Plan Issued to Integrate Industry Chain to Accelerate Company Development

The company announcement will start with 9.

12 trillion cash acquisition of Sinochem Crops and Agro-Research, with a total target performance of 2 in the next three years.

97 ppm, significantly increased; and mergers and acquisitions will improve the company’s industrial chain and help the company’s development.

It is optimistic that the company has entered the gold growth stage, and its 深圳桑拿网 profit is expected to increase at the same time.

Ignore the impact of mergers and acquisitions for the time being, and maintain the company’s EPS forecast for 2019/20/21 to 3.

46/3.

69/4.

24 yuan, maintain target price of 75 yuan (corresponding to 22 times PE in 2019) and “Buy” rating.

9.

1.2 billion acquisition of Sinochem Crops and Agricultural Research Corporation.

Yang Nong plans to start with 9.

Acquired Sinochem Crops and Agro-Research Company for USD 1.2 billion, and the two targets promised a total of three years of performance.

9.7 billion (about 9 times PE acquisition).

The merger will enable Yangnong to integrate pesticide research and development, production and sales channels under Sinochem International, and use the production platform (Shenyang Science and Technology and Nantong Technology) to integrate with Yangnong Chemical to further increase the production capacity of listed companies and enhance competition among listed companies.force.
Each of the acquisition targets has its own strengths.

1. Sinochem crops: a complete pesticide production and marketing platform for the industrial chain.

Its subordinates, Shenyang Science and Technology Innovation, and Nantong Science and Technology respectively locate the production and distribution of the original drug, preparations, master the production capacity of the original drug, and have 128 registration certificates.

From the perspective of fixed assets, there are currently construction projects1.

10,000 yuan, which will contribute new income and profits after production.

2. Agricultural research company: The design and development of positioning original medicines. At present, it has a total of 348 internal and external patents (of which 286 are internal), and its research and development strength and reserves are strong.

The flumorpholine developed by the company is the first ever industrialized acetic acid variety with independent intellectual property rights. R & D personnel Liu Changling is currently the company’s core manager.

The transaction will directly increase the company’s performance and help long-term development.

The acquisition is a cash acquisition, which directly increases the company’s performance (based on the 2018 pro forma, the net profit attributable to the mother is 8).

9.5 billion rose to 9.

840,000 yuan, an increase of 9.

85%), and the company’s 2018 pro forma operating income will be 52.

900 million rose to 85.

800 million (ranked second in the country in 2018, second only to Andoma with global operations).

In addition, the strategic significance brought by this merger is more obvious. After the merger, the company will become the only pesticide management platform within Sinochem Group. At the same time, the opening of the industrial chain will further strengthen the company’s capabilities in R & D and distribution, and significantly enhance the company’s sustainable developmentAbility and speed.

Risk factors: 1. uncertainty of re-approval; 2. appreciation risk of the subject assessment; 3. risk of transaction integration

Maintain “Buy” rating.

The company has entered the stage of gold growth, and its profit is expected to increase at the same time.

Regardless of the impact of mergers and acquisitions, the EPS forecast for 19/20/21 is maintained at 3.

46/3.

69/4.

24 yuan, maintain target price of 75 yuan and “buy” rating.