Adisseo (600299) 2018 Annual Report Comment: Falling Methionine Price Leads to Performance Decline and Waits to Come
The event company released its 2018 annual report on the evening of March 20, 2019. In 2018, the company realized revenue of 11.4 billion yuan, an increase of 10%; net profit attributable to mothers9.
26 ppm, an average of 30% over a ten-year period;
70,000 yuan, an average of 30% in ten years; net cash flow from operating activities was 14.
410,000 yuan, 43% more than the average budget; average ROE6.
90%, ten-year average 3.
The company plans to distribute 1 for every 10 shares.
73 yuan, a total of 4 dividends.
A brief comment on the intensified competition in the methionine industry and the pressure on performance caused pressure companies to continue to predict in the performance report that the net 天津夜网 profit in 2018 will be 9.
10,000 yuan, the annual reported net profit is slightly higher than expected.
The company’s performance fell sharply, mainly due to intensified competition in the methionine industry, price declines and exchange losses: the average price of liquid methionine in 2018 was 15.
4 yuan / kg, 18 of 2017 each year.
4 yuan / kg nitrate 16%, which caused the company’s gross profit margin to fall to 45% in 2018, and gross profit fell 30% to 28.
Although the price of vitamin A has actually increased from 351 yuan / kg to 701 yuan / kg, the company’s dependence on outsourcing of citral did not form a complete industrial chain. Problems with the supply of raw materials led to a decrease in volume, and the price increase and shrinkage affected to some extentIncreased profits.
The contraction of the company’s ROE was caused by the decrease in net profit margin caused by the increase in gross profit margin, and the asset turnover rate and debt did not change significantly.
In terms of cash flow, the company’s current net ratio and current revenue ratio are 119% and 104%, respectively. The cash flow is very healthy, the inventory, receivables, and changes in accounts receivable match the company’s business scale, and the turnover rate has remained basically stable.
The acquisition of minority stakes in Nutrition Group by cash will significantly increase the company’s net profit at the beginning. The company announced that it intends to acquire 15% of the shares of Adisseo Nutrition Group held by Blue Star Group in cash. The estimated value of the underlying equity is approximately $ 3.6 billion.
The headquarters of the company has already held 85% equity of Adisseo Nutrition Group. After the completion of the acquisition, Adisseo Nutrition Group will become a wholly-owned subsidiary of the company.
Adisseo Nutrition Group’s grain is the company’s main source of profit and loss for minority shareholders, and the profit and loss of minority shareholders in 2016, 2017 and 2018 were 4 respectively.
9 billion, accounting for 24%, 27% and 31% of the net profit attributable to the mother.
This acquisition is a cash acquisition and has no dilutive effect on EPS. It is expected that after the completion of the acquisition, the company’s net profit attributable to its mother company will increase significantly. However, due to the impact of the nutrition group’s preferred shares, the minority shareholders’ profits and losses will not be completely eliminated.
VA prices have fallen and the industry’s long-term pattern is still improving. In October 2017, due to the BASF fire accident, global VA prices skyrocketed, and the price of 500,000 units of VA was once as high as 1,425 yuan / kg, and then gradually fell back to the normal range after BASF resumed production.
Although at the end of 2018, due to the poor transportation of emergency factories in Europe, VA increased slightly again, but it is not comparable to the booming market from the end of 2017 to the beginning of 2018.
So far in 2019Q1, VA387 yuan / kg, the annual decline has reached 71%.
Looking forward to the future, despite the expansion of VA, more production capacity is still in the hands of several giants, and the industry pattern has not undergone a fundamental change. The construction of overseas BASF and other devices has been earlier, and the start-up has become unstable, while the demand side is relatively rigid.If there is an unexpected contraction on the supply side, the price of the product will continue to increase.
Methionine: The competition in the industry is becoming increasingly fierce, and the company’s cost advantage will obviously be laughed into. In 2018, the company’s Nanjing and Spain projects and Japan’s Sumitomo 10-target project will be put into operation. The global methionine production capacity will be 171.
5 additives increased to 189.
5 minimum value, the demand is about 135 digits, and the average annual growth rate is about 5.
The follow-up industry’s supplementary production capacity also includes Hebang Biological 5 replacement (expected to start production in 2019), Xinhecheng 10 plan (to start production at the end of 2019), Evonik 15 replacement (to start production in 2020), Novus Division 12 replacement (to start production in 2020),Xinhecheng has 15 goals (commissioned in 2021), and the company’s Nanjing 18-target project (commissioned in 2021). The industry will increase its total production capacity by about 75 tons, and competition will become increasingly fierce.
The company’s methionine scale advantage is obvious. After the Panda Phase 2 and Polar Projects are put into production, the methionine production capacity has increased to 49, and the output ratio has reached 26%.
After the new Nanjing plant 18 is gradually put into production, the company will reach a 67-inch methionine production capacity, which will secure the industry’s second-best position.
After the completion of the new Nanjing plant, scale effects will be realized with integrated production capacity, and production costs will be reduced by another 20%.
There is reason to believe that even if the methionine industry is gradually facing brutal competition, the company can have its own cost advantage that leads it to the end. Endogenous and simultaneous extension, special products became the second business unit reported by the company’s special products revenue increased by 31% to 22.
6 trillion, accounting for 16% of revenue in 2017.
63% rose to 19.
81%; accounting for 24% of gross profit.
01% rose to 27.
95% has become a veritable second business pillar of the company.
The scale of the company’s special product business has expanded rapidly. The integration benefited from the integration of Nutriad and the reorganization benefited from the strong sales growth of products such as Hilary Selenium and Antailai.
In addition, the company’s previously developed Rhodimax A + Dry products have the advantages of both liquid methionine concentration and solid methionine, and have great potential in the subsequent market.
It is estimated that the company’s net profit attributable to its parent in 2019 and 2020 will be US $ 1.2 billion and 1.4 billion respectively (the acquisition of minority equity is not yet calculated), and the corresponding PEs will be 26X and 23X.