NPS: Pesticide demand is gradually recovering, and gross margins are rising

 On February 29, 2024, Shenzhen NPS held an online conference to accept the research from 29 investment institutions such as Shenwan Hongyuan and Guotai AMC, and Mr. Mo Mojun, secretary of the Board of directors, introduced the company's operation and answered relevant questions.

Basic business situation:

(1) The opening year of the pesticide sector is the peak, and the demand gradually recovers. Affected by the price of the technical, the gross profit margin of pesticides will increase.

(2) Featured fresh sector: Blueberries are in the peak season. The 2023/2024 production season has shipped 6,200 tons as of February 27. So far, the production season price is relatively stable. The company adjusted the channel organization and split the Blueberry marketing division into three centers, with products, channels and customers all centering on a single brand, while other supplementary brands are classified as joint sales department

At present, this system is relatively smooth in the development of the market, and the shipment and pricing are relatively stable. At present, the daily harvest of blueberries is about 200 tons/day. Hainan dragon fruit gradually entered the batch picking, the peak of the production season in the first to second quarters, and the first batch of bird's nest fruit will be picked in May this year

Investor Q&A:

Q:What are the blueberry production expectations for March, and for the whole second quarter?

A:At present, from the perspective of Yunnan Park, the production is relatively stable, Q1 is expected to reach 9,000 tons, and the production season of 20,000 tons and above is expected to remain unchanged.

Q:The production of early spring blueberries in the first quarter accounted for the proportion of the whole season production increased from about 25% last year to the current 40% to 50%, what’s  the reason?

A:The first is that the company uses early-onset technology to bring forward the peak production. Balanced distribution of production, reduce the amount of concentration, better control of market release, and more orderly arrangements for picking. Second, the structure of planting varieties has been adjusted, the proportion of patented seedlings has increased, and the production area has increased significantly, so the fruit of patented seedlings has an early listing time, high yield and good quality.

Q: Is the patented seedling promotion technology physical technology or chemical technology?

A: Early-promoting technology is to adjust the phenological period of crops. It normally blooms in October to November, and fruit is picked in January. After the adjustment, flowering began in August to September, and the fruit picking time was advanced accordingly. Mainly through comprehensive regulation, including light, water and fertilizer, so that the plant physiologic adjustment.

Q:Why are blueberry prices so strong?

A: During the Spring Festival, shipments are relatively stable and prices fluctuate less. One to two weeks after the Spring Festival, we usually have to digest the backlog of Spring Festival, but this year's pressure is not as heavy as expected; At present, the import of blueberries has come to an end, other fruits in the season are not listed, and there is a gap in market supply, and the price competition is less pressure.

Q: What are the reasons for the change in the quarterly cost of 2024 compared to 2023?

A: The overall cost will increase, one is because of the increase in scale, the organization structure and personnel allocation are more perfect, and the corresponding sales expenses and management expenses are increased. Second, the quality control is more strict, such as picking with stem, etc., the corresponding cost increases, and it is expected that the whole production season is 38,000 yuan/ton.

Q:Is it possible to develop new crop varieties in the future?

A: For now, the main mission is still Blueberry. In the future, the back-end planting level, processing level and marketing ability will be further improved. Guangxi Macadamia nut has laid out more than 8,000 mu, and it is expected that some output will be produced in 2025. At present, the company has also begun to lay out and operate the blueberry off-season sales team and network.

Q: What is the overall size of Yunnan Blueberry and the expansion rate of the company and its competitors?

A: The most direct influencing factor is land circulation, the difficulty of land acquisition continues to increase, some orchards land clearing seedling compensation fees are higher, there is a certain area of large-scale land is difficult to find, large-scale base construction appears few. In the future, it is possible to explore areas with higher altitudes and lower temperatures, but it requires strong technical support and is highly uncertain.