The pesticide industry in China is undergoing profound changes. For a long time, the pesticide industry in China has always given the impression of a low-barrier, high-pollution, and fully-competitive industries with as many as 2,300 companies participating. A large number of enterprises concentrate on the production of a few low-end products. Enterprises do not have sufficient research and development capabilities, raw materials cannot be controlled, and the development of the industry is based on the damage to the environment.
However, since 2006, some basic problems in the development of the pesticide industry in China have gradually improved: First of all, under the background of the country changing the mode of extensive economic development, environmental protection has increasingly attracted attention, a large number of serious pollution, low technology, weak financial strength. The original drug factory was gradually shut down, and the dominant enterprises received strong support in industrial policies. Second, some of the larger pesticide companies have been able to gradually develop and produce some important intermediate raw materials after the initial accumulation period. Use basic medicine to do some compounding work and carry out active market development, such as Yangnong Chemical (love shares, quotes, information), Red Sun (love shares, quotes, information) group, Noppsin (love stocks, quotes, information) , Xin'an shares (love stocks, quotes, information) and Huaxing Chemicals (love stocks, quotes, information), etc.; again, due to the increasingly severe environmental pressure of European and American companies, the global pesticide industry has emerged from the transfer of developing countries led by China. The trend will bring precious technical input and global market opportunities for China's pesticide industry, and it is typical to be Field.
Fortunately, these trends are combined with the coincident bull market of global agricultural products (love stocks, market conditions, and information). This has injected a powerful impetus for the transformation and development of China's pesticide industry. These factors will eventually lead to related companies. It is highly probable that actual profits exceed expectations. Therefore, it is recommended to allocate the support to the agriculture industry. For individual stocks, it maintains a "recommended" rating for Xinan, Huaxing Chemicals and Yangnong Chemical.
Benefiting the global agricultural bull market In this round of global agricultural bull market, the enthusiasm for planting agricultural products will increase globally, which will lead to an increase in the demand for agricultural products (pesticides, fertilizers), demand-driven product prices and higher gross profit margins. Sustainability and more than expected.
On the one hand, the expansion of global grain acreage is not optimistic. Taking China as an example, since 1996, the area of ​​arable land in China has continued to decrease, from 130 million hectares at the beginning of the year to 122 million hectares in 2006. The planting area of ​​food crops has also been on a downward trend overall, from 113 million hectares in 1996. It fell to 105 million hectares in 2006.
On the other hand, the soaring oil price has led to the rise of alternative energy represented by biomass energy, which has led to a significant increase in the demand for agricultural products. Taking the United States, the world’s largest food exporter, for example, due to subsidy on ethanol production, the corn used to produce fuel ethanol is 54 million tons in 2006-07, and it is expected to reach 84 million tons in 07-08, close to the world. The total amount of corn trade. With the rise of biomass energy, the traditional food-exporting countries have expanded their domestic demand for food and reduced their export volume, which has contributed to an increase in the prices of international markets. As biomass energy crops have a higher income, farmers are investing more land resources in the production of energy crops. As a result, the supply of competitive crops has been reduced and prices have risen. As a result, the prices of agricultural products have risen in an all-round manner and global agricultural products have risen. cycle.
The strengthening of agricultural products has led to a significant increase in the enthusiasm for the cultivation of agricultural products around the world, which will drive the development of the agriculture industry. With the growth of population and the reduction of arable land, the increase in grain production has increasingly depended on the increase in investment in agriculture. In 2007, China's summer grain output increased by 6%. According to expert estimates, 70% of this comes from the expansion of planting area, and another 30% comes from the increase in fertilizer and pesticide applications. As China's chemical fertilizer application rate is already at a relatively high level, it is actually more dependent on the increase in the amount of pesticide application.
Compared with developed countries, the use of pesticides in our country is still at a relatively low level. The consumption of pesticides per unit of arable land is only US$8.6/ha, which is only 1/4 of that of the United States and 1/15 of France, and there is still much room for development in the future.
China is the world's largest producer of pharmaceuticals. In 2007, China's chemical pesticide production (the original drug) reached 1.731 million tons, an increase of 24.3% over 2006. The oversupply of raw drug production capacity as a whole, the excess raw drug production capacity mainly rely on exports to digest. Since 2000, pesticide sales in China have maintained an average growth rate of 19%. From January to August 2007, the sales revenue of the chemical pesticide industry reached 60.612 billion yuan, and the annual sales revenue is expected to exceed 90 billion yuan.
Five major positive changes have driven the development of the industry. Environmental protection requirements have been tightened to increase the improvement of policy barriers to industry barriers. In recent years, the state has strengthened its policy control over pesticide companies. The National Medium- and Long-Term Scientific and Technological Development Plan and the 11th Five-Year Industrial Plan all indicate that the development of pesticides should prevent redundant construction and reduce the excessive number of production sites. Intensive management.
The continuous improvement of environmental protection requirements will prompt the market share to concentrate on the dominant enterprises. Because only a dominant company can have sufficient technology and scale advantages to expand its production capacity, and at the same time it can inhibit the expansion impulse of the whole industry, it will help to prolong the business cycle of the industry and increase the industry's barriers to entry.
After the cyanobacterial incident in Taihu last year, local governments increased their efforts to rectify serious chemical companies with small and medium pollution. In the next two years, China's environmental protection standards will gradually increase, and the threshold for the chemical industry, especially the pesticide industry, will become higher and higher. Taking glyphosate as an example, Xinan invested about 50 million yuan in glyphosate environmental protection equipment on Xin'an River two years ago, and its annual operating costs have been maintained at around 20 million. This cost is unbearable for a large number of domestic small glyphosate plants with capacities of 1,000-5,000 tons/year. Therefore, although there are more new production capacity for glyphosate planned in the next two years, the effective capacity that can actually reach production is limited in the new production capacity. Especially in 2008, the overall supply and demand of glyphosate will remain tight, and the advantages will be maintained. The company will be able to maximize the benefits of the industry's business climate.
Transfer of international production capacity to domestic countries The pesticide industry in developed countries has experienced a period of rapid growth. The development of agriculture in developing countries has become the driving force behind the growth of the global pesticide industry. With the development of economy, China has gradually become the center of world manufacturing industry, and the pesticide industry is no exception. The global transfer of pesticides to developing countries led by China has brought valuable technological input and global market opportunities to enterprises and accelerated the development of the domestic pesticide industry.
Advantageous R&D Capabilities of Enterprises Increasingly The development of pesticides has the characteristics of high risk, high investment, and long cycle. Companies with weaker capabilities cannot afford to undertake. A new variety needs 10 to 13 million compounds to be screened from synthesis to commercialization of the compound. It takes 10 years and costs more than 200 million U.S. dollars. Therefore, research and development investment is crucial for the long-term development of pesticide companies. In recent years, domestic pesticide companies have increased their R&D investment year by year. In 2003, the research and development expenditure of Yangnong Chemical was only 690,000 yuan, and it was increased to 5.63 million yuan in 2006. Novozymes' R&D investment has also been maintained at more than 3% of sales revenue for a long time.
Although compared with 10% of the R&D investment made by international advanced pesticide companies, there is still a large gap between Chinese companies, but their progress is obvious to all. For example, Yangnong Chemical has key technologies and production capabilities in some intermediate areas of pesticides upstream; The Group broke the monopoly of internationally advantageous companies and developed an important pesticide and pharmaceutical intermediate pyridine; Novozymes has achieved remarkable success in the development of downstream application technologies.
The structure of pesticide products tends to be reasonable In the long run, the potential of herbicides and fungicides in pesticides is greater than that of pesticides. With the large-scale transfer of domestic rural labor force, the development of rural intensive cultivation, and the promotion of agricultural farming technology, the growth of herbicide consumption has been promoted. Herbicides have the fastest growth among the three major categories of pesticides, especially non-selective herbicides. For example, the demand for glyphosate has increased even more.
The industry has gradually concentrated on the size of China's pesticide companies, which is dominated by competitive enterprises. At present, there are more than 600 pesticide production companies in China and more than 1800 pesticide preparation enterprises. However, in recent years, the development of advantageous enterprises has accelerated significantly, and the proportion of the top 20 companies in the total industrial output value of the current total industry has reached 31.5%. According to the planning of related departments, the market share of the top 50 domestic pesticide production enterprises in the future will reach 60%.
The pesticide industry in China is undergoing profound changes. For a long time, the pesticide industry in China has always given the impression of a low-barrier, high-pollution, and fully-competitive industries with as many as 2,300 companies participating. A large number of enterprises concentrate on the production of a few low-end products. Enterprises do not have sufficient research and development capabilities, raw materials cannot be controlled, and the development of the industry is based on the damage to the environment.
However, since 2006, some basic problems in the development of the pesticide industry in China have gradually improved: First of all, under the background of the country changing the mode of extensive economic development, environmental protection has increasingly attracted attention, a large number of serious pollution, low technology, weak financial strength. The original drug factory was gradually shut down, and the dominant enterprises received strong support in industrial policies. Second, some of the larger pesticide companies have been able to gradually develop and produce some important intermediate raw materials after the initial accumulation period. Use basic medicine to do some compounding work and carry out active market development, such as Yangnong Chemical (love shares, quotes, information), Red Sun (love shares, quotes, information) group, Noppsin (love stocks, quotes, information) , Xin'an shares (love stocks, quotes, information) and Huaxing Chemicals (love stocks, quotes, information), etc.; again, due to the increasingly severe environmental pressure of European and American companies, the global pesticide industry has emerged from the transfer of developing countries led by China. The trend will bring precious technical input and global market opportunities for China's pesticide industry, and it is typical to be Field.
Fortunately, these trends are combined with the coincident bull market of global agricultural products (love stocks, market conditions, and information). This has injected a powerful impetus for the transformation and development of China's pesticide industry. These factors will eventually lead to related companies. It is highly probable that actual profits exceed expectations. Therefore, it is recommended to allocate the support to the agriculture industry. For individual stocks, it maintains a "recommended" rating for Xinan, Huaxing Chemicals and Yangnong Chemical.
Benefiting the global agricultural bull market In this round of global agricultural bull market, the enthusiasm for planting agricultural products will increase globally, which will lead to an increase in the demand for agricultural products (pesticides, fertilizers), demand-driven product prices and higher gross profit margins. Sustainability and more than expected.
On the one hand, the expansion of global grain acreage is not optimistic. Taking China as an example, since 1996, the area of ​​arable land in China has continued to decrease, from 130 million hectares at the beginning of the year to 122 million hectares in 2006. The planting area of ​​food crops has also been on a downward trend overall, from 113 million hectares in 1996. It fell to 105 million hectares in 2006.
On the other hand, the soaring oil price has led to the rise of alternative energy represented by biomass energy, which has led to a significant increase in the demand for agricultural products. Taking the United States, the world’s largest food exporter, for example, due to subsidy on ethanol production, the corn used to produce fuel ethanol is 54 million tons in 2006-07, and it is expected to reach 84 million tons in 07-08, close to the world. The total amount of corn trade. With the rise of biomass energy, the traditional food-exporting countries have expanded their domestic demand for food and reduced their export volume, which has contributed to an increase in the prices of international markets. As biomass energy crops have a higher income, farmers are investing more land resources in the production of energy crops. As a result, the supply of competitive crops has been reduced and prices have risen. As a result, the prices of agricultural products have risen in an all-round manner and global agricultural products have risen. cycle.
The strengthening of agricultural products has led to a significant increase in the enthusiasm for the cultivation of agricultural products around the world, which will drive the development of the agriculture industry. With the growth of population and the reduction of arable land, the increase in grain production has increasingly depended on the increase in investment in agriculture. In 2007, China's summer grain output increased by 6%. According to expert estimates, 70% of this comes from the expansion of planting area, and another 30% comes from the increase in fertilizer and pesticide applications. As China's chemical fertilizer application rate is already at a relatively high level, it is actually more dependent on the increase in the amount of pesticide application.
Compared with developed countries, the use of pesticides in our country is still at a relatively low level. The consumption of pesticides per unit of arable land is only US$8.6/ha, which is only 1/4 of that of the United States and 1/15 of France, and there is still much room for development in the future.
China is the world's largest producer of pharmaceuticals. In 2007, China's chemical pesticide production (the original drug) reached 1.731 million tons, an increase of 24.3% over 2006. The oversupply of raw drug production capacity as a whole, the excess raw drug production capacity mainly rely on exports to digest. Since 2000, pesticide sales in China have maintained an average growth rate of 19%. From January to August 2007, the sales revenue of the chemical pesticide industry reached 60.612 billion yuan, and the annual sales revenue is expected to exceed 90 billion yuan.
Five major positive changes have driven the development of the industry. Environmental protection requirements have been tightened to increase the improvement of policy barriers to industry barriers. In recent years, the state has strengthened its policy control over pesticide companies. The National Medium- and Long-Term Scientific and Technological Development Plan and the 11th Five-Year Industrial Plan all indicate that the development of pesticides should prevent redundant construction and reduce the excessive number of production sites. Intensive management.
The continuous improvement of environmental protection requirements will prompt the market share to concentrate on the dominant enterprises. Because only a dominant company can have sufficient technology and scale advantages to expand its production capacity, and at the same time it can inhibit the expansion impulse of the whole industry, it will help to prolong the business cycle of the industry and increase the industry's barriers to entry.
After the cyanobacterial incident in Taihu last year, local governments increased their efforts to rectify serious chemical companies with small and medium pollution. In the next two years, China's environmental protection standards will gradually increase, and the threshold for the chemical industry, especially the pesticide industry, will become higher and higher. Taking glyphosate as an example, Xinan invested about 50 million yuan in glyphosate environmental protection equipment on Xin'an River two years ago, and its annual operating costs have been maintained at around 20 million. This cost is unbearable for a large number of domestic small glyphosate plants with capacities of 1,000-5,000 tons/year. Therefore, although there are more new production capacity for glyphosate planned in the next two years, the effective capacity that can actually reach production is limited in the new production capacity. Especially in 2008, the overall supply and demand of glyphosate will remain tight, and the advantages will be maintained. The company will be able to maximize the benefits of the industry's business climate.
Transfer of international production capacity to domestic countries The pesticide industry in developed countries has experienced a period of rapid growth. The development of agriculture in developing countries has become the driving force behind the growth of the global pesticide industry. With the development of economy, China has gradually become the center of world manufacturing industry, and the pesticide industry is no exception. The global transfer of pesticides to developing countries led by China has brought valuable technological input and global market opportunities to enterprises and accelerated the development of the domestic pesticide industry.
Advantageous R&D Capabilities of Enterprises Increasingly The development of pesticides has the characteristics of high risk, high investment, and long cycle. Companies with weaker capabilities cannot afford to undertake. A new variety needs 10 to 13 million compounds to be screened from synthesis to commercialization of the compound. It takes 10 years and costs more than 200 million U.S. dollars. Therefore, research and development investment is crucial for the long-term development of pesticide companies. In recent years, domestic pesticide companies have increased their R&D investment year by year. In 2003, the research and development expenditure of Yangnong Chemical was only 690,000 yuan, and it was increased to 5.63 million yuan in 2006. Novozymes' R&D investment has also been maintained at more than 3% of sales revenue for a long time.
Although compared with 10% of the R&D investment made by international advanced pesticide companies, there is still a large gap between Chinese companies, but their progress is obvious to all. For example, Yangnong Chemical has key technologies and production capabilities in some intermediate areas of pesticides upstream; The Group broke the monopoly of internationally advantageous companies and developed an important pesticide and pharmaceutical intermediate pyridine; Novozymes has achieved remarkable success in the development of downstream application technologies.
The structure of pesticide products tends to be reasonable In the long run, the potential of herbicides and fungicides in pesticides is greater than that of pesticides. With the large-scale transfer of domestic rural labor force, the development of rural intensive cultivation, and the promotion of agricultural farming technology, the growth of herbicide consumption has been promoted. Herbicides have the fastest growth among the three major categories of pesticides, especially non-selective herbicides. For example, the demand for glyphosate has increased even more.
The industry has gradually concentrated on the size of China's pesticide companies, which is dominated by competitive enterprises. At present, there are more than 600 pesticide production companies in China and more than 1800 pesticide preparation enterprises. However, in recent years, the development of advantageous enterprises has accelerated significantly, and the proportion of the top 20 companies in the total industrial output value of the current total industry has reached 31.5%. According to the planning of related departments, the market share of the top 50 domestic pesticide production enterprises in the future will reach 60%.
However, since 2006, some basic problems in the development of the pesticide industry in China have gradually improved: First of all, under the background of the country changing the mode of extensive economic development, environmental protection has increasingly attracted attention, a large number of serious pollution, low technology, weak financial strength. The original drug factory was gradually shut down, and the dominant enterprises received strong support in industrial policies. Second, some of the larger pesticide companies have been able to gradually develop and produce some important intermediate raw materials after the initial accumulation period. Use basic medicine to do some compounding work and carry out active market development, such as Yangnong Chemical (love shares, quotes, information), Red Sun (love shares, quotes, information) group, Noppsin (love stocks, quotes, information) , Xin'an shares (love stocks, quotes, information) and Huaxing Chemicals (love stocks, quotes, information), etc.; again, due to the increasingly severe environmental pressure of European and American companies, the global pesticide industry has emerged from the transfer of developing countries led by China. The trend will bring precious technical input and global market opportunities for China's pesticide industry, and it is typical to be Field.
Fortunately, these trends are combined with the coincident bull market of global agricultural products (love stocks, market conditions, and information). This has injected a powerful impetus for the transformation and development of China's pesticide industry. These factors will eventually lead to related companies. It is highly probable that actual profits exceed expectations. Therefore, it is recommended to allocate the support to the agriculture industry. For individual stocks, it maintains a "recommended" rating for Xinan, Huaxing Chemicals and Yangnong Chemical.
Benefiting the global agricultural bull market In this round of global agricultural bull market, the enthusiasm for planting agricultural products will increase globally, which will lead to an increase in the demand for agricultural products (pesticides, fertilizers), demand-driven product prices and higher gross profit margins. Sustainability and more than expected.
On the one hand, the expansion of global grain acreage is not optimistic. Taking China as an example, since 1996, the area of ​​arable land in China has continued to decrease, from 130 million hectares at the beginning of the year to 122 million hectares in 2006. The planting area of ​​food crops has also been on a downward trend overall, from 113 million hectares in 1996. It fell to 105 million hectares in 2006.
On the other hand, the soaring oil price has led to the rise of alternative energy represented by biomass energy, which has led to a significant increase in the demand for agricultural products. Taking the United States, the world’s largest food exporter, for example, due to subsidy on ethanol production, the corn used to produce fuel ethanol is 54 million tons in 2006-07, and it is expected to reach 84 million tons in 07-08, close to the world. The total amount of corn trade. With the rise of biomass energy, the traditional food-exporting countries have expanded their domestic demand for food and reduced their export volume, which has contributed to an increase in the prices of international markets. As biomass energy crops have a higher income, farmers are investing more land resources in the production of energy crops. As a result, the supply of competitive crops has been reduced and prices have risen. As a result, the prices of agricultural products have risen in an all-round manner and global agricultural products have risen. cycle.
The strengthening of agricultural products has led to a significant increase in the enthusiasm for the cultivation of agricultural products around the world, which will drive the development of the agriculture industry. With the growth of population and the reduction of arable land, the increase in grain production has increasingly depended on the increase in investment in agriculture. In 2007, China's summer grain output increased by 6%. According to expert estimates, 70% of this comes from the expansion of planting area, and another 30% comes from the increase in fertilizer and pesticide applications. As China's chemical fertilizer application rate is already at a relatively high level, it is actually more dependent on the increase in the amount of pesticide application.
Compared with developed countries, the use of pesticides in our country is still at a relatively low level. The consumption of pesticides per unit of arable land is only US$8.6/ha, which is only 1/4 of that of the United States and 1/15 of France, and there is still much room for development in the future.
China is the world's largest producer of pharmaceuticals. In 2007, China's chemical pesticide production (the original drug) reached 1.731 million tons, an increase of 24.3% over 2006. The oversupply of raw drug production capacity as a whole, the excess raw drug production capacity mainly rely on exports to digest. Since 2000, pesticide sales in China have maintained an average growth rate of 19%. From January to August 2007, the sales revenue of the chemical pesticide industry reached 60.612 billion yuan, and the annual sales revenue is expected to exceed 90 billion yuan.
Five major positive changes have driven the development of the industry. Environmental protection requirements have been tightened to increase the improvement of policy barriers to industry barriers. In recent years, the state has strengthened its policy control over pesticide companies. The National Medium- and Long-Term Scientific and Technological Development Plan and the 11th Five-Year Industrial Plan all indicate that the development of pesticides should prevent redundant construction and reduce the excessive number of production sites. Intensive management.
The continuous improvement of environmental protection requirements will prompt the market share to concentrate on the dominant enterprises. Because only a dominant company can have sufficient technology and scale advantages to expand its production capacity, and at the same time it can inhibit the expansion impulse of the whole industry, it will help to prolong the business cycle of the industry and increase the industry's barriers to entry.
After the cyanobacterial incident in Taihu last year, local governments increased their efforts to rectify serious chemical companies with small and medium pollution. In the next two years, China's environmental protection standards will gradually increase, and the threshold for the chemical industry, especially the pesticide industry, will become higher and higher. Taking glyphosate as an example, Xinan invested about 50 million yuan in glyphosate environmental protection equipment on Xin'an River two years ago, and its annual operating costs have been maintained at around 20 million. This cost is unbearable for a large number of domestic small glyphosate plants with capacities of 1,000-5,000 tons/year. Therefore, although there are more new production capacity for glyphosate planned in the next two years, the effective capacity that can actually reach production is limited in the new production capacity. Especially in 2008, the overall supply and demand of glyphosate will remain tight, and the advantages will be maintained. The company will be able to maximize the benefits of the industry's business climate.
Transfer of international production capacity to domestic countries The pesticide industry in developed countries has experienced a period of rapid growth. The development of agriculture in developing countries has become the driving force behind the growth of the global pesticide industry. With the development of economy, China has gradually become the center of world manufacturing industry, and the pesticide industry is no exception. The global transfer of pesticides to developing countries led by China has brought valuable technological input and global market opportunities to enterprises and accelerated the development of the domestic pesticide industry.
Advantageous R&D Capabilities of Enterprises Increasingly The development of pesticides has the characteristics of high risk, high investment, and long cycle. Companies with weaker capabilities cannot afford to undertake. A new variety needs 10 to 13 million compounds to be screened from synthesis to commercialization of the compound. It takes 10 years and costs more than 200 million U.S. dollars. Therefore, research and development investment is crucial for the long-term development of pesticide companies. In recent years, domestic pesticide companies have increased their R&D investment year by year. In 2003, the research and development expenditure of Yangnong Chemical was only 690,000 yuan, and it was increased to 5.63 million yuan in 2006. Novozymes' R&D investment has also been maintained at more than 3% of sales revenue for a long time.
Although compared with 10% of the R&D investment made by international advanced pesticide companies, there is still a large gap between Chinese companies, but their progress is obvious to all. For example, Yangnong Chemical has key technologies and production capabilities in some intermediate areas of pesticides upstream; The Group broke the monopoly of internationally advantageous companies and developed an important pesticide and pharmaceutical intermediate pyridine; Novozymes has achieved remarkable success in the development of downstream application technologies.
The structure of pesticide products tends to be reasonable In the long run, the potential of herbicides and fungicides in pesticides is greater than that of pesticides. With the large-scale transfer of domestic rural labor force, the development of rural intensive cultivation, and the promotion of agricultural farming technology, the growth of herbicide consumption has been promoted. Herbicides have the fastest growth among the three major categories of pesticides, especially non-selective herbicides. For example, the demand for glyphosate has increased even more.
The industry has gradually concentrated on the size of China's pesticide companies, which is dominated by competitive enterprises. At present, there are more than 600 pesticide production companies in China and more than 1800 pesticide preparation enterprises. However, in recent years, the development of advantageous enterprises has accelerated significantly, and the proportion of the top 20 companies in the total industrial output value of the current total industry has reached 31.5%. According to the planning of related departments, the market share of the top 50 domestic pesticide production enterprises in the future will reach 60%.
The pesticide industry in China is undergoing profound changes. For a long time, the pesticide industry in China has always given the impression of a low-barrier, high-pollution, and fully-competitive industries with as many as 2,300 companies participating. A large number of enterprises concentrate on the production of a few low-end products. Enterprises do not have sufficient research and development capabilities, raw materials cannot be controlled, and the development of the industry is based on the damage to the environment.
However, since 2006, some basic problems in the development of the pesticide industry in China have gradually improved: First of all, under the background of the country changing the mode of extensive economic development, environmental protection has increasingly attracted attention, a large number of serious pollution, low technology, weak financial strength. The original drug factory was gradually shut down, and the dominant enterprises received strong support in industrial policies. Second, some of the larger pesticide companies have been able to gradually develop and produce some important intermediate raw materials after the initial accumulation period. Use basic medicine to do some compounding work and carry out active market development, such as Yangnong Chemical (love shares, quotes, information), Red Sun (love shares, quotes, information) group, Noppsin (love stocks, quotes, information) , Xin'an shares (love stocks, quotes, information) and Huaxing Chemicals (love stocks, quotes, information), etc.; again, due to the increasingly severe environmental pressure of European and American companies, the global pesticide industry has emerged from the transfer of developing countries led by China. The trend will bring precious technical input and global market opportunities for China's pesticide industry, and it is typical to be Field.
Fortunately, these trends are combined with the coincident bull market of global agricultural products (love stocks, market conditions, and information). This has injected a powerful impetus for the transformation and development of China's pesticide industry. These factors will eventually lead to related companies. It is highly probable that actual profits exceed expectations. Therefore, it is recommended to allocate the support to the agriculture industry. For individual stocks, it maintains a "recommended" rating for Xinan, Huaxing Chemicals and Yangnong Chemical.
Benefiting the global agricultural bull market In this round of global agricultural bull market, the enthusiasm for planting agricultural products will increase globally, which will lead to an increase in the demand for agricultural products (pesticides, fertilizers), demand-driven product prices and higher gross profit margins. Sustainability and more than expected.
On the one hand, the expansion of global grain acreage is not optimistic. Taking China as an example, since 1996, the area of ​​arable land in China has continued to decrease, from 130 million hectares at the beginning of the year to 122 million hectares in 2006. The planting area of ​​food crops has also been on a downward trend overall, from 113 million hectares in 1996. It fell to 105 million hectares in 2006.
On the other hand, the soaring oil price has led to the rise of alternative energy represented by biomass energy, which has led to a significant increase in the demand for agricultural products. Taking the United States, the world’s largest food exporter, for example, due to subsidy on ethanol production, the corn used to produce fuel ethanol is 54 million tons in 2006-07, and it is expected to reach 84 million tons in 07-08, close to the world. The total amount of corn trade. With the rise of biomass energy, the traditional food-exporting countries have expanded their domestic demand for food and reduced their export volume, which has contributed to an increase in the prices of international markets. As biomass energy crops have a higher income, farmers are investing more land resources in the production of energy crops. As a result, the supply of competitive crops has been reduced and prices have risen. As a result, the prices of agricultural products have risen in an all-round manner and global agricultural products have risen. cycle.
The strengthening of agricultural products has led to a significant increase in the enthusiasm for the cultivation of agricultural products around the world, which will drive the development of the agriculture industry. With the growth of population and the reduction of arable land, the increase in grain production has increasingly depended on the increase in investment in agriculture. In 2007, China's summer grain output increased by 6%. According to expert estimates, 70% of this comes from the expansion of planting area, and another 30% comes from the increase in fertilizer and pesticide applications. As China's chemical fertilizer application rate is already at a relatively high level, it is actually more dependent on the increase in the amount of pesticide application.
Compared with developed countries, the use of pesticides in our country is still at a relatively low level. The consumption of pesticides per unit of arable land is only US$8.6/ha, which is only 1/4 of that of the United States and 1/15 of France, and there is still much room for development in the future.
China is the world's largest producer of pharmaceuticals. In 2007, China's chemical pesticide production (the original drug) reached 1.731 million tons, an increase of 24.3% over 2006. The oversupply of raw drug production capacity as a whole, the excess raw drug production capacity mainly rely on exports to digest. Since 2000, pesticide sales in China have maintained an average growth rate of 19%. From January to August 2007, the sales revenue of the chemical pesticide industry reached 60.612 billion yuan, and the annual sales revenue is expected to exceed 90 billion yuan.
Five major positive changes have driven the development of the industry. Environmental protection requirements have been tightened to increase the improvement of policy barriers to industry barriers. In recent years, the state has strengthened its policy control over pesticide companies. The National Medium- and Long-Term Scientific and Technological Development Plan and the 11th Five-Year Industrial Plan all indicate that the development of pesticides should prevent redundant construction and reduce the excessive number of production sites. Intensive management.
The continuous improvement of environmental protection requirements will prompt the market share to concentrate on the dominant enterprises. Because only a dominant company can have sufficient technology and scale advantages to expand its production capacity, and at the same time it can inhibit the expansion impulse of the whole industry, it will help to prolong the business cycle of the industry and increase the industry's barriers to entry.
After the cyanobacterial incident in Taihu last year, local governments increased their efforts to rectify serious chemical companies with small and medium pollution. In the next two years, China's environmental protection standards will gradually increase, and the threshold for the chemical industry, especially the pesticide industry, will become higher and higher. Taking glyphosate as an example, Xinan invested about 50 million yuan in glyphosate environmental protection equipment on Xin'an River two years ago, and its annual operating costs have been maintained at around 20 million. This cost is unbearable for a large number of domestic small glyphosate plants with capacities of 1,000-5,000 tons/year. Therefore, although there are more new production capacity for glyphosate planned in the next two years, the effective capacity that can actually reach production is limited in the new production capacity. Especially in 2008, the overall supply and demand of glyphosate will remain tight, and the advantages will be maintained. The company will be able to maximize the benefits of the industry's business climate.
Transfer of international production capacity to domestic countries The pesticide industry in developed countries has experienced a period of rapid growth. The development of agriculture in developing countries has become the driving force behind the growth of the global pesticide industry. With the development of economy, China has gradually become the center of world manufacturing industry, and the pesticide industry is no exception. The global transfer of pesticides to developing countries led by China has brought valuable technological input and global market opportunities to enterprises and accelerated the development of the domestic pesticide industry.
Advantageous R&D Capabilities of Enterprises Increasingly The development of pesticides has the characteristics of high risk, high investment, and long cycle. Companies with weaker capabilities cannot afford to undertake. A new variety needs 10 to 13 million compounds to be screened from synthesis to commercialization of the compound. It takes 10 years and costs more than 200 million U.S. dollars. Therefore, research and development investment is crucial for the long-term development of pesticide companies. In recent years, domestic pesticide companies have increased their R&D investment year by year. In 2003, the research and development expenditure of Yangnong Chemical was only 690,000 yuan, and it was increased to 5.63 million yuan in 2006. Novozymes' R&D investment has also been maintained at more than 3% of sales revenue for a long time.
Although compared with 10% of the R&D investment made by international advanced pesticide companies, there is still a large gap between Chinese companies, but their progress is obvious to all. For example, Yangnong Chemical has key technologies and production capabilities in some intermediate areas of pesticides upstream; The Group broke the monopoly of internationally advantageous companies and developed an important pesticide and pharmaceutical intermediate pyridine; Novozymes has achieved remarkable success in the development of downstream application technologies.
The structure of pesticide products tends to be reasonable In the long run, the potential of herbicides and fungicides in pesticides is greater than that of pesticides. With the large-scale transfer of domestic rural labor force, the development of rural intensive cultivation, and the promotion of agricultural farming technology, the growth of herbicide consumption has been promoted. Herbicides have the fastest growth among the three major categories of pesticides, especially non-selective herbicides. For example, the demand for glyphosate has increased even more.
The industry has gradually concentrated on the size of China's pesticide companies, which is dominated by competitive enterprises. At present, there are more than 600 pesticide production companies in China and more than 1800 pesticide preparation enterprises. However, in recent years, the development of advantageous enterprises has accelerated significantly, and the proportion of the top 20 companies in the total industrial output value of the current total industry has reached 31.5%. According to the planning of related departments, the market share of the top 50 domestic pesticide production enterprises in the future will reach 60%.
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