Fine chemicals: Focus on the uptrend of the sector and subdivision industry leaders

Profit forecast and investment rating: We estimate that the company's net profit for 19~21 years will be 3.2, 450 and 560 million yuan respectively, corresponding to 22.5, 16.0 and 12.9 times PE

Real Madrid Technology: a rapidly growing specialty surfactant leading enterprise

Small variety sector continues to increase volume: the company adopts the business strategy of "large variety adjustment structure, functional small varieties to make profits", constantly optimizes the product structure, and the sales proportion of small variety sector gradually increases, and the profitability continues to increase; At the same time, actively expand the production of small varieties by means of fundraising and investment to further improve the company's profitability. Layout of high gross profit of small varieties and new material products, fundraising projects into the volume period. At present, the company has a production capacity of 180,000 tons, including 110,000 tons of Lvke An factory, 70,000 tons of Zhangzhen Industrial New Area, and more than 1,300 kinds of products, which is the most complete variety of domestic enterprises. The company's future projects mainly focus on small varieties and new material products with higher gross profit, including 85,000 tons of small varieties of surfactants and 100,000 tons of new material resins. The new layout of products will continue to optimize the company's product structure and significantly improve the company's profitability.

Performance growth and valuation: It is estimated that the company's net profit from 2019 to 2021 will be 271/364/462 million yuan, which corresponds to 17.0, 12.7 and 10.0 times of the valuation in 19 to 21 years.

4 Pesticides

Yangnong Chemical: a domestic pesticide leading company with steady growth, Rudong Phase III, preparation and other projects will become the company's endogenous increment in the next few years

The permethrin business still maintains strong profitability and builds a safety margin for the company: The company is the only company in the whole industrial chain of pyrethroid insecticides in China, and its domestic market share ranks first. The company continues to build a safety margin for the company by virtue of technical barriers and safety and environmental barriers. Rudong Phase III project has been approved by the EIA, and is expected to gradually put into operation in 2020: Rudong Phase III investment is 2.022 billion yuan, and it is expected to achieve revenue of 1.541 billion yuan and net profit of 372 million yuan after reaching the target. The fourth Rudong phase and 32,600 tons of pesticide preparation projects are expected to achieve a revenue of 1.023 billion yuan and a net profit of 128 million yuan after reaching the target; 32,600 tons of pesticide preparation project investment of 202 million yuan, is expected to achieve a revenue of 625 million yuan, net profit of 72.73 million yuan. Acquisition of Sinochem crops and agricultural research company to complement the shortcomings: Sinochem crops downstream sales channels spread across a wide range, smoke company has a strong R & D and innovation capabilities, and the advantages of Yangnong engineering can be complementary.