With the great improvement in China's glyphosate market and glyphosate business profitability in 2012, China's three listed glyphosate companies, namely Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca), Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan) and Anhui Huaxing Chemical Industry Co., Ltd. (Anhui Huaxing), all witnessed unexpected good performance in the whole year of 2012, and their net profit growth rate all exceeded 500% in 2012 compared with 2011 (TABLE 7), especially Anhui Huaxing's net profit growth rate, according to Glyphsoate China Monthly Report 1302 issued by CCM I in February.
The net profit growth rate of Anhui Huaxing seems the highest one among these three listed companies, but in fact it's the lowest one.
Anhui Huaxing's expected net profit in 2012 is about USD17.65 million-USD17.96 million (RMB109.99 million-RMB111.92 million), but thereinto about USD16.87 million (RMB105.13 million) is the total return from the 100% equity transfer of Anhui Huaxing's wholly-owned subsidiary—Anhui Huaxing Construction Investment Co., Ltd. (Anhui Huaxing Construction).
If the total return from the 100% equity transfer of Anhui Huaxing Construction is excluded, the actual expected net profit of Anhui Huaxing is about less than USD1.61 million (RMB10 million) in 2012, and it's actual expected net profit growth rate is less than 159%. Besides, Zhejiang Wynca and Nantong Jiangshan both failed to transfer their subsidiaries and didn't obtain any return. Therefore, the net profit growth rate of Anhui Huaxing is the lowest one among these three companies.
High profitability in glyphosate business in 2012 contributes to high expected net profit in the three companies.
On one hand, the ex-works price of glyphosate related products increased greatly in 2012 over 2011. Specifically, the average ex-works price of glyphosate technical and PMIDA was about USD4,630/t and USD2,449/t in 2012, up by about 25.21% and 12.4% respectively over 2011. The average ex-works price of glyphosate formulations rose a lot in 2012, especially glyphosate 41% IPA and glyphosate 62% IPA. In detail, the average ex-works price of glyphosate 41% IPA, glyphosate 62% IPA, glyphosate 50% SP and glyphosate 75.7% WSG in 2012 was about USD2,167/t, USD2,749/t, USD2,585/t, and USD4,030/t, up by 11.84%, 15.35%, 7.78% and 5.42% respectively over 2011 (FIGURE 3).
On the other hand, the export value of glyphosate produced by these three companies increased greatly in 2012 over 2011. In detail, the export value of glyphosate produced by Anhui Huaxing, Nantong Jiangshan and Zhejiang Wynca was about USD20.65 million, USD282.23 million and USD399.77 million in 2012, up by about 14%, 59% and 23% respectively over 2011 (FIGURE 4).
In fact, these high expected net profit growth rate figures in 2012 represent the highest ones in these three listed glyphosate companies since their listing. These figures not only indicate bad operating performances in these three companies in 2011, but also reflected their success to swiftly grasp the sales opportunity in the improved glyphosate market in 2012.
Table Contents of Glyphsoate China Monthly Report 1302:
Anhui Huaxing's non-public issuing stock plan is approved by China Securities Regulatory Commission
Nantong Jiangshan's stock price rises 111.79% in 2012
Monsanto achieves great operating performance in first quarter of fiscal year 2013
Listed glyphosate companies' net profit to surge in 2012
Industrial concentration of Chinese glyphosate keeps increasing in 2012
One glyphosate registration in Jan. 2013
Glyphosate prices drop slightly in Feb. 2013
Glyphosate technical export price decreases slightly in Dec. 2012
Overview of glyphosate export in 2012
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