Limin Shares to build a synthetic biology laboratory, focusing on the layout of 'biosynthesis' products

Recently, Limin Shares responded to the progress of the company in the direction of synthetic biology on the investor interactive platform, saying that the company will increase investment in technology research and development, is preparing to build a synthetic biology (enzyme engineering, genetic engineering) laboratory, and the company will focus on the layout of "biosynthesis" product direction. 

The company's other production and marketing operations and management have maintained a stable state, and the company has maintained a high level of confidence in its business performance in 2024. 

The following are the relevant issues:

1. Please give us an overview of our business in the first half of the year

At present, the company has three major business types: international and domestic plant protection and technical. With the inventory clearance of overseas channels and the arrival of the pesticide season, the sales amount and sales quantity of international and technical business are higher than that of last year. Overall, the capacity utilization rate of the company's installations has improved compared to last year. Q1 most product prices fell to a historical low, Q2 bottomed out signs of rebound obvious, such as the company's products Avermectin, Emamectin Benzoate, Pymetrozine, Dinotefuran, Fosthiazate, etc. have seen price rises and supply exceeds supply, recently Chlorothalonil rebounded from 16,500 yuan/ton to 20,000 yuan/ton.

Since this year, the company has mainly carried out the following work to enhance the competitiveness of enterprises: First, increase internal potential, reduce costs and increase efficiency. To ensure that the company's core products Mancozeb, Avermectin, Emamectin Benzoate and other advantages have always maintained the quality and cost benchmark position. Recently, BASF plans to stop the production of Glufosinate ammonium in the German Knapsack region and Frankfurt production site by the end of 2024, and then close the two production sites, the company uses continuous gas phase production of Glufosinate ammonium, which has obvious advantages. The scientific and technological achievements of "Gas phase route - Multi-enzyme directed continuous synthesis of high optical pure L-glyphosate and industrialization" have been appraised by experts, who believe that "the new technical route developed by the project is innovative, green and environmentally friendly, and the overall technology is at the international leading level".

Second, accelerate the informatization project and build a unified integrated information operation platform for the Group and its subsidiaries with unified coding rules, consistent data, simple operation, centralized management, safety and reliability. At the same time, it effectively integrates OA, CRM, SRM, ERP, HR and other system modules to open up the system interface, realize the sharing and circulation of information, improve the collaborative work efficiency among various departments and subsidiaries within the Group, provide comprehensive, accurate and timely information support for enterprise operation, and enhance the scientific and forward-looking decision-making. It has laid the foundation for the future development of the group. So far, the project is progressing smoothly.

Third, increase investment in technology research and development, is preparing to build a synthetic biology (enzyme engineering, genetic engineering) laboratory, the company will focus on the layout of "biosynthesis" product direction. The company's other production and marketing operations and management work remained stable, and the company maintained high confidence in its business performance in 2024.

2. Current production capacity of the company 

At present, the company has a production capacity of 102,700 tons of technicals and 114,400 tons of formulations, including 45,000 tons of Mancozeb (fungicide), 7,000 tons of Glufosinate ammonium (herbicide), and 10,000 tons of Glufosinate-P(herbicide). The first phase has been built to 2,000 tons, and the production capacity will be further improved by the end of this year.

3. Please analyze the reasons for the increase of the company's Q1 accounts receivable, credit impairment loss and inventory impairment loss. Will the company still have the risk of credit impairment and inventory impairment in the second half of the year?

This situation is related to the company's business cycle, mainly because of the growth of shipments in this cycle, generally Q1 and Q2 increase, Q3 and Q4 decrease or rush back. The company's domestic business in the peak season open credit policy, off-season recovery, at the end of the zero, and receive a part of the light deposit in advance; International business is given a corresponding account period based on the customer's credit guarantee and rating.

4. In the face of the current relatively difficult business situation, how does the company judge? How to solve these problems in the second half of the year? And when does the company expect the market to return to relatively normal levels?

In 2023, the revenue and profit of the pesticide industry have dropped, which is the most difficult year in recent years, reflecting the increasing difficulties and challenges of the industry, and also reflecting the cyclical characteristics of the industry. Industry adjustment generally occurs once in three to five years, through the elimination of backward production capacity, remove small scattered, conducive to the sustainable development of excellent enterprises.

The company has a rich market product portfolio, with fungicides, herbicides, pesticides, fertilizers four categories of high-quality products series, covering rice, wheat, corn, citrus, pears, apples, grapes, vegetables and other crops, a variety of products belong to the leading brand, the market in more than 30 provinces and cities in China and more than 130 countries and regions overseas. Recently, the company has strengthened the development of overseas markets, successively obtained independent registration certificates in important markets, and accelerated the establishment of overseas subsidiaries.

After the adjustment period of 2023 and 2024, it is conducive to the development of the pesticide industry. The company has confidence in the pesticide industry, agrochemical products are rigid demand, with the growth of the world population and the promotion of China's food security strategy, agrochemical products will be more important. In recent years, the frequent occurrence of extreme weather has led to the aggravation of crop diseases and pests, and the demand for agrochemical products has continued to increase.