BSM's Pendimethalin is expected to increase in overseas markets

In 2022, BSM(300796.SZ) recorded record revenue and net profit. As the business of its main product, Pendimethalin, continues to grow, BSM announced at its earnings briefing on July 17 that it will be a strategic supplier to the world's leading agrochemical companies by actively transferring its production capacity to other countries. Regarding the performance of the first quarter of this year, Zhong Xijun, general manager of BSM said, the company is currently full of orders and operating conditions are good."

According to the financial report, in 2022, BSM achieved a revenue of 768 million yuan, with a year-on-year growth of 44.91%. At the performance meeting, BSM’s management attributed the increase to good overall production and sales, many orders and higher pricing of key products.

In 2022, BSM cooperated with BASF, an international agrochemical giant, to open the order channel increment. It is understood that last year due to BASF production line operating rate is low, the global supply is tight, Pendimethalin maintains a high economy. Chen Feng, Chairman of BSM, said, in the future, as our cooperation with BASF continues to deepen, the company will further undertake BASF's production capacity of Pendimethalin, and the proportion of overseas market will further increase.

BSM is the leading enterprise in the Pendimethalin industry. According to Tu Wenjun, Chief Financial Officer, the company's current production capacity of Pendimethalin is 12,000 tons, and the capacity utilization rate of Pendimethalin in 2022 is at a historical high, with a total output of 11,999.19 tons and sales volume of 11,020.49 tons. In addition, in 2022, the company’s Pendimethalin technical market share of about 60% in the domestic.

Zhang Xiaoqian, secretary of the Board of Directors, pointed out at the performance meeting that the company's ongoing research and development projects cover new pesticide varieties such as Methoxyfenozide and Topramezone, as well as five new materials such as 3-Pentanone and 1-Pentene.

At the performance meeting, the project under construction of BSM has attracted investors' attention. It is understood that the company's current projects under construction include Hydrogenation series, Pendimethalin series, Methoxyfenozide series product technical transformation project, annual output of 8,500 tons of Pentanone series green new material project.

Zhong Xijun said that by the end of 2022, the annual output of 8,500 tons of Pentanone series green new material project’s investment progress of 70.48%. The technical transformation Project of Hydrogenation series, Pendimethalin series and Methoxyfenozide series products is expected to be ready for use in August 2024. After the project is put into operation, an additional capacity of 2,000 tons of Methoxyfenozide technical and 1,000 tons of methoxyfenazide formulation will be added. In addition, the company's Ningbo research and development center project progress has been more than half.

According to the annual report, the price of Ortho-xylene , the main raw material of BSM, increased in 2022, mainly because upstream manufacturers stopped production for maintenance, resulting in a decrease in supply. Zhang explained, this overhaul is part of the upstream manufacturers of non-regular planned overhaul, do not have sustainability. The company has planned and prepared goods in advance according to the overhaul plan of the raw material manufacturer, and the production of the company's products has not been affected by the manufacturer's stop-work overhaul.

According to IFIND data, the annual average price of Pendimethalin  technical (96%) in 2022 was 65,600 yuan/ton, with a year-on-year growth of 22.16%. In the fourth quarter of 2022, the price of Pendimethalin (96%) increased further, with the average price of 67,200 yuan/ton in a single quarter, a year-on-year growth of 10.58% and a quarter-on-quarter growth of 3.43%.