Guoguang: The current production capacity can meet the development needs of the company in the next 3-5 years

Recently, Guoguang accepted a specific object of research, the company's vice president He Jie introduced the basic situation and future development trend of plant growth regulator.

Plant growth regulator is synthesized or extracted from microorganisms, which has the same or similar functions as plant endogenous hormones. Our country takes it into pesticide management, the acquisition of a pesticide certificate often needs 3-5 years or even longer time, so the high threshold for industry access has been formed. The driving force for the future development of the industry comes from the change of the traditional agricultural farming mode and the new demand for agricultural production technology. The large-scale and intensive agricultural production and management, mechanized operation and intelligent management are profoundly changing the traditional farming mode, which brings good opportunities to provide services and products for agricultural production. Because plant growth regulators have the advantage of reducing labor and coordination mechanization, the demand for plant growth regulators is becoming more rigid. With the continuous development of large-scale planting mode and the continuous improvement of agricultural science and technology, the market of plant growth regulators will continue to expand.

Q:What is the cost structure of the company's products? 

A:It is mainly composed of technicals, auxiliaries, labor cost and equipment depreciation, among which technical accounts for relatively high. In recent years, due to the increasingly strict environmental safety requirements, the price of upstream technicals has fluctuated greatly, which reached its peak in the second quarter of last year, so the company's gross profit margin also showed a significant decline. Since the second half of last year, upstream raw material prices fell, the first quarter of this year, the company's gross profit margin has picked up, is expected to improve in the future.

      Q: What is the impact of the company's 2022 impairment on the future?

A:The company acquired 51% of the equity of Hebi Quanfeng, and the investment cost exceeded the fair value of the net assets of Hebi Quanfeng, forming about 100 million yuan of goodwill. In 2022, due to various factors, the profit of Hebi Quanfeng was lower than expected, so the company set aside a goodwill impairment loss of 66 million yuan. In addition, affected by the financial crisis of Evergrande, the debt of Evergrande will continue to be deducted and reduced by about 26 million yuan in 2022. By the end of 2022, all the debt receivable and financial management of Evergrande have been deducted and reduced. The foregoing will not have a lasting impact on the future of the Company.

Q: How about end-market demand this year?

     A: Non-agricultural pesticide market is mainly used in urban landscaping, forestry pest control, environmental pest control, rehabilitation of famous and old trees, home gardening and flowers, etc. From 2020 to 2022, due to the impact of sealing and control, technology promotion and technical services can not be carried out normally in many cases, which affects sales. In addition, market demand grows slowly. Therefore, the company's non-agricultural pesticidebusiness revenue changed little compared with that before the epidemic. Since the first half of this year, the above adverse factors have gradually eliminated, and demand is recovering. pesticide market demand is relatively rigid, the company will strengthen four marketing business plates in the blank crop, blank area promotion, to promote terminal sales continue to force

Q:What is the company's capacity?

A: At present, the company has a production capacity of 14,500 tons of technicals and 88,800 tons of formulations, which can meet the development needs of the company in the next 3-5 years.