RedSun: promoting Chlorantraniliprole project, and may invest in production capacity in the future.

Recently, RedSun accepted a specific object research, some hot questions of investor concern answered by the company.

Q1: could you estimate the annual production and sales of this year according to the current operating rate of several key products of the company?

A: The operating rate of the main products remains high. Paraquat and Diquat are needed urgently. And the overall production capacity increased by nearly 22% compared with the same period last year. Therefore, it is expected that the production and sales volume of major products will be significantly increased this year.

Q2: The prices of Paraquat and Diquat are very high, mainly due to Pyridine price support or demand reasons? What are the company's current selling prices and gross margins? Could you give a judgment on future price trend?

A: The prices of Paraquat and Diquat are supported by raw materials and demand, product prices are relatively strong, gross margin also maintained at a high level. Prices are expected to remain largely stable in the future.

Q3: Does the announcement of the establishment of new company mean that the project of Yunnan Qujing will have substantial progress? Could you tell us more about the project in Qujing?

A: On Oct 21, the company released the announcement of outbound investment, which mainly stated that the wholly-owned company, Huazhou established Huazhou Biotechnology with its own capital in Qujing. Now, we have completed the registration procedures and obtained the license. We plan to invest in the construction of four major circular economy product chain projects. The reasons of the investment in Qujin are as follow: (1). The price advantages of some basic production factors, such as water, electricity and gas in this region. (2). This region is close to Southeast Asian countries, and the main raw materials of the company's main products have good supporting facilities in the local area, and the price has cost advantage, which is conducive to the optimization of the upstream chain extension of the company's industrial chain and further strengthening the core competitiveness of the company's whole industrial chain. (3). For the current policies that restrict chemical projects, project construction in Qujing is not restricted by these policies, which can ensure the sustainable development of subsequent production.

Q4: The prices of Paraquat and Diquat are good, is the demand also increased? Which regions are growing?

A: In recent years, the demand for Paraquats has grown considerably in the North American market. The reasons for this increase are the preferential import tariffs and the spraying of drones in USA.

The main reason for the increased demand of the Diquat Dibromide products is that after Paraquat was banned in Brazil, the substitution of Paraquat led to a substantial increase in the demand of the Diquat dibromide products. The company has obtained the registration in Paraguay and is accelerating the registration in the Brazilian market. In the future, Diquat dichloride will gradually replace Diquat dibromide and the market blank after Paraquat was banned.

Q5: Could Paraquat replace some of the expensive Glyphosate and Glufosinate-ammonium?

A: All of the three products are non-selective herbicides, so, Paraquat can replace Glyphosate and Glufosinate-ammonium in the performance of weeding, especially the faster weeding speed of Paraquat. Secondly, the price acceptability of Glyphosate and Glufosinate-ammonium decreased in the African market, so Paraquat has a relatively high market share in Africa.

Q7: The company's R & D expenses have grown more this year. What projects are mainly used to?

A: R & D expenses are mainly invested in new product technology research, like Glufosinate-ammonium, Glufosinate-p and Chlorantraniliprole, as well as regular product technology upgrading, such as Paraquat and Diquat.

Q8: Does the high cost of energy in oversea markets present an opportunity for the company? Is there any news that overseas competitors will stop production?

A: The high cost of energy will have an adverse impact on the manufacturing costs of some overseas pesticide enterprises and will be conducive to the competitiveness of Chinese pesticide enterprises in the international market.

Q9: In the future, if the market of Glufosinate-ammonium and Glufosinate-p is further improved, will it replace the existing market of Paraquat?

A: Glufosinate-ammonium and Glufosinate-p are mainly used for weeding. Paraquat is mainly used for weeding, throttling and stubble replacement. Especially in the use of crop throttling and stubble replacement, Paraquat has irreplaceable advantages. In terms of price, Paraquat is more cost-effective than Glufosinate-ammonium and Glufosinate-p.

Q10: Because of the large production capacity distribution of Pyrethroids, will there be product overcapacity, resulting in low prices and poor profitability?

A: Pyrethroids belong to RedSun’s main products with stable market channels. The production capacity of Pyrethroids of the company will also be implemented in stages to build according to the market demand and stabilize the relationship between supply and demand.

Q11: Are there new products put into production in the downstream of the Pyridine industry chain?

A: At present, the subsidiary’s annual output of 2,000 tons of Chlorantraniliprole project is being actively promoted and relevant market registration is being carried out simultaneously. Comparatively speaking, the company's Chlorantraniliprole products have the competitive advantage of the whole industry chain. In the future, the company will rely on and give full play to the advantages of the whole industrial chain to invest in the new capacity of Chlorantraniliprole project.