Denghai Seeds (002041) 2019 First Quarterly Report Review: Revenue Decline Continues to Narrow and Rising Costs Drag Down Performance Growth

Event: The company announced the 2019 first quarter report, which reported a merger and achieved operating income of 1.

36 trillion, a decrease of 2.
.

29%; net profit attributable to owners of the parent company was 471.

150,000 yuan, a decrease of 75 from the same period last year.

82%; the realization of basic profit income is 0.

0054 yuan, a decrease of 75 from the same period last year.

57%.

The decrease in revenue has further narrowed, and rising costs have dragged down the growth of the performance growth report, and the company’s operating income1.

3.6 billion, down 2 every year.

29%, and the company’s revenue growth rate in 17/18 was -49.

84% and -5.

32%, the decline in revenue has further narrowed, indicating that the company’s fundamentals are in a cycle of improvement.

At the same time, the report totals that the company’s operating costs and expenses have continued to increase, and operating costs have increased each year.

45%, during which the rate of expenses increased by ten years.

72%.

We believe that the increase in operating costs may be due to the decline in product sales prices and the steady rise in seed production costs; the increase in management expenses and research and development expenses is mainly due to increases in office expenses, depreciation expenses, employee compensation and research and development expenses.

Leadership changes, 70 years later became the main report board of directors, major changes have taken place in the company’s board of directors, except for the honorary 杭州夜网论坛 chairman of the board of directors after the reorganization of Mr. Li Denghai, all directors and independent directors have changed in the last term, and the board is youngerAfter 70s became the main force of the board.

From the perspective of personnel composition, under the current trend of homogenization of varieties and intensified marketing, the entry of scientific research and sales backbones into the board of directors will help the company’s R & D to better connect with the market, enhance the company’s ability to adapt to the market, and cultivate the company.Create a competitive variety and reverse the company’s marketing advantage base.

The supply and demand structure of the industry is steadily improving. Due to the decline in the area of corn seeds and the increase in the capacity of deep processing of 杭州桑拿 corn, the supply and demand of corn has gradually improved.

According to the announcement of the National Bureau of Statistics, the annual corn production in 20182.

5.7 billion tons, down from 0 previously.

7%, while the total demand for peanut corn reached 2.

6.2 billion tons, an increase of about 8 in ten years.

7%. For the first time, the industry’s lack of demand for corn production in that year, net corn stocks declined, and the industry’s supply and demand margins gradually improved.

Investment advice and profit forecast The company’s fundamentals are expected to be good. With the gradual improvement of the industry’s supply and demand structure, the cost and cost pressure of the company will help alleviate, and the continuous high R & D will promote the company to build a diversity advantage.

As a leader in the corn seed industry, the fundamentals have gradually improved and the performance has grown in depth. The company’s operating inflection point has shifted. We are optimistic about the company’s development prospects. We maintain a net profit of 1 at 19/20/21.

21/1.

30/1.

Earnings forecast of 5.6 billion US dollars, corresponding to 19/20/21 EPS are 0.

14/0.

15/0.

18 yuan, the current PE corresponding to 2020 is 44.

40 times, maintaining the company’s “overweight” investment rating.

The earliest drop is 2.

29%; net profit attributable to owners of the parent company was 471.

150,000 yuan, down 75 every year.

82%; the realization of basic profit income is 0.
0054 yuan, down 75.
57%.

The decrease in revenue has further narrowed, the increase in costs has dragged down the performance growth report, and the company’s operating income1.

3.6 billion, down 2 every year.

29%, while the company’s revenue growth rate in 2017/18 decreased by 49.

84% and 5.

32%, the decline in revenue has further narrowed, indicating that the company’s fundamentals are in a cycle of improvement.

At the same time, the report totals that the company’s operating costs and expenses have continued to increase, and operating costs have increased each year.

45%, during which the rate of expenses increased by ten years.

72%.

We believe that the increase may be due to the decline in product sales prices and the steady rise in seed production costs; the increase in management expenses and research and development costs is mainly due to increases in office expenses, depreciation expenses, employee compensation and research and development expenses.

Leadership changes, 70 years later became the main report board of directors, major changes have taken place in the company’s board of directors, except for the honorary chairman of the board of directors after the reorganization of Mr. Li Denghai, all directors and independent directors have changed in the last term, and the board is youngerAfter 70s became the main force of the board.

From the perspective of personnel composition, under the current trend of homogenization of varieties and intensified marketing, the entry of scientific research and sales backbones into the board of directors will help the company’s R & D to better connect with the market, enhance the company’s marketing ability to respond to the market, and cultivate the company.Create a competitive variety and reverse the company’s marketing advantage base.

The supply and demand structure of the industry has steadily improved. Due to the decline in the area of corn planting and the increase in the capacity of deep processing of corn, the supply and demand of corn has gradually improved.

According to the announcement of the National Bureau of Statistics, the annual corn production in 20182.

5.7 billion tons, down from 0 previously.

7%, while the total demand for peanut corn reached 2.

6.2 billion tons, an increase of about 8 in ten years.

7%. For the first time, the industry’s lack of demand for corn production in that year, net corn stocks declined, and the industry’s supply and demand margins continued to improve.

Investment advice and profit forecast The company’s fundamentals are expected to improve. With the gradual improvement of the industry’s supply and demand structure, the company’s cost and expense pressures have been alleviated, and continuous high R & D has promoted the establishment of a diversity advantage for the company.

As a leader in the corn seed industry, the fundamentals have gradually improved and the performance has grown in depth. The company’s operating inflection point has shifted. We are optimistic about the company’s development prospects. We maintain a net profit of 1 at 19/20/21.

21/1.

30/1.

Earnings forecast of 5.6 billion US dollars, corresponding to 19/20/21 EPS are 0.

14/0.

15/0.

18 yuan, currently expected to correspond to 43 times PE in 2020, maintaining the company’s “overweight” investment rating.

Risk reminder: natural disaster risk, competition risk, new product market launch is less than expected risk.