Pesticides, fertilizers, and stable price subsidies increase demand

The supply of chemical fertilizers is mainly achieved through the storage of chemical fertilizers. In 2005, China began to implement the policy of lighter chemical fertilizers, and the main type of lean reserves is urea. The current total reserve of light reserves is 11 million tons, accounting for about 20% of the annual production.

The agricultural "State of the Eighth" once again emphasized the guarantee of agricultural supplies, indicating that the country will pay more attention to the implementation of pale storage policies in the future. In addition, farmers' income and fertilizer input show a clear positive correlation. The rising price of grain purchases and the continuous increase of agricultural subsidies will increase the income of farmers in grain production, which will greatly increase the enthusiasm of farmers for grain production, and thus promote the use of pesticides. Fertilizer demand.

Urea industry: In the first two months of 2009, China’s urea production rose by 3.5% year-on-year. In the first quarter, urea gradually entered the demand season, and urea prices maintained an overall upward trend. The elimination of the national fertilizer price limit policy also promoted the rise in urea prices. At present, the price of urea has entered a stable stage. The dynamic price-earnings ratio of the urea industry has reached more than 20 times in 2009, and valuation has no advantage. We give the industry a “neutral” rating.

Pesticide industry: Compared with 2008, there will be more insect pests this year, mainly due to two reasons: In 2008, there were fewer domestic insect pests due to snow disasters, and there will be recoverable growth this year; this year is the year of major drought, and it is also a pest. High year of the year. According to past disaster laws, locusts, Spodoptera littoralis, leguminosae, aphids and other pests and diseases may pose a serious threat to the growth of agricultural products. After drought-fed irrigation, the humidity in the field increased. As the temperature rises, wheat stripe rust, powdery mildew, and sheath blight will aggravate. The increase in insect pests will undoubtedly boost the demand for pesticide products. In addition, the country will step up the rectification of the pesticide market this year, strictly inspect illegal pesticide companies, and accelerate the withdrawal of highly toxic pesticides from the market, which will promote the development of highly efficient and low-toxic pesticides. At present, the dynamic price-earnings ratio of the pesticide industry in 2009 has reached about 24 times, and the valuation is relatively high. We give the industry a “neutral” rating.

Yangnong Chemical, the company's main products for health use, agricultural pyrethroid products, herbicides, the current production capacity of agricultural pyrethroid 3000-4000 tons / year, 2000-3000 tons of health use of pyrethrin, 10,000 tons of glyphosate / year. Among them, the company's agricultural pyrethroid products account for 30% of the domestic market share, and are the leading domestic agricultural pyrethroid company. It is expected that the company's agricultural pyrethroid products will maintain a 30% growth in sales volume in the next two years. In addition, the company will add 30,000 tons of glyphosate production capacity in the first half of this year. It is expected that sales in 2009 and 2010 will be 30,000 tons and 40,000 tons, respectively. It is expected that the company's earnings per share for 2009-2010 will be 1.84 and 2.23 yuan, respectively, giving a "buy" rating.