| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 46.67 | -42 |
| Intrinsic value (DCF) | 27.23 | -66 |
| Graham-Dodd Method | 27.13 | -66 |
| Graham Formula | n/a |
Jiangsu Yangnong Chemical Co., Ltd. is a leading Chinese agrochemical company specializing in the production and distribution of pesticides, with particular expertise in pyrethroid insecticides. Founded in 1999 and headquartered in Yangzhou, China, the company serves both domestic and international markets through its export operations. Yangnong Chemical operates in the agricultural inputs sector within basic materials, providing essential crop protection solutions that enhance agricultural productivity and food security. The company's product portfolio includes insecticides crucial for both agricultural applications and public health uses, positioning it as a key player in China's agrochemical industry. With its strategic focus on pyrethroids—a class of synthetic insecticides known for their effectiveness and lower environmental impact—Yangnong Chemical has established itself as a significant manufacturer in this niche segment. The company's integrated production capabilities and distribution network enable it to serve the growing global demand for efficient crop protection solutions while maintaining competitive operational efficiency.
Jiangsu Yangnong Chemical presents a mixed investment profile with several positive fundamentals offset by sector-specific challenges. The company demonstrates solid profitability with net income of CNY 1.20 billion on revenue of CNY 10.43 billion, representing a healthy 11.5% net margin. Strong operating cash flow of CNY 2.16 billion provides financial flexibility, while moderate debt levels (CNY 1.19 billion) against cash reserves of CNY 1.62 billion indicate a stable balance sheet. The company's beta of 0.991 suggests market-average volatility, and a dividend yield provides income component. However, the agricultural inputs sector faces regulatory pressures, environmental concerns, and commodity price sensitivity. The significant capital expenditures (CNY -1.84 billion) indicate ongoing investment needs, while the concentrated focus on pyrethroids creates both specialization benefits and product concentration risks. Investors should monitor regulatory developments in China's chemical industry and global agricultural demand trends.
Jiangsu Yangnong Chemical's competitive position is defined by its specialization in pyrethroid insecticides, which provides both advantages and limitations. The company's focused expertise in this specific chemical class allows for deep technical knowledge, efficient manufacturing processes, and established customer relationships in this niche segment. Pyrethroids are valued for their effectiveness and relatively favorable environmental profile compared to some alternatives, positioning Yangnong well in markets increasingly concerned with sustainable agriculture. However, this specialization also creates vulnerability to regulatory changes affecting pyrethroids specifically and limits diversification benefits. The company faces intense competition from larger, more diversified agrochemical giants that offer broader product portfolios and greater R&D resources. Yangnong's domestic Chinese manufacturing base provides cost advantages but may face increasing environmental compliance costs as China tightens chemical industry regulations. The company's export orientation provides market diversification but exposes it to currency fluctuations and international trade tensions. While Yangnong has established itself as a credible pyrethroid specialist, its ability to compete against global players with more comprehensive crop protection solutions and stronger distribution networks remains challenging. The company's future competitiveness will depend on maintaining its cost advantage, navigating regulatory environments, and potentially expanding its product range beyond its current specialization.