First-Half 2023 Performance Summary: Several Agrochemical Companies Report Significant Declines in Earnings

AgroPages Chinese Website Report: Recently, nine agrochemical companies, including Xinong Shares, have successively released their 2023 interim reports.

In the first half of 2023, influenced by macroeconomic conditions, cyclical fluctuations in the agrochemical industry, and shifts in market supply and demand, channel inventories were cleared slowly, agrochemical prices continued to decline, overall market turnover remained subdued, and the semiannual results of agrochemical companies all posted substantial year-on-year declines.

Xinnong Shares’ net profit for the first half of the year fell 74.08% year over year.

On August 23, Xin Nong Co., Ltd. released its semi-annual results report, reporting first-half 2023 revenue of RMB 485 million, down 30.89% year over year; net profit attributable to shareholders of the listed company of RMB 25.64 million, a year-over-year decline of 74.08%; and basic earnings per share of RMB 0.16, down 74.6% from the same period last year.

Regarding the primary reasons for the decline in net profit for the first half of 2023 compared with the same period last year, according to the company’s earlier earnings forecast, the agrochemical industry experienced excessively high channel inventories of active ingredients and intermediates in the first half, while incremental customer demand plummeted. As a result, the company’s key active‑ingredient and intermediate products saw both volume and price declines, leading to a weakening of profitability across these product lines.

According to the announcement, during the reporting period, the company focused on a differentiation strategy, consolidating and deepening its position as the leading brand in bactericides. It maintained a concentrated focus on its “6+1” core crops, prioritized its flagship product (Bisheng), and expanded into strategic new products (Er Lv Yi Xin), delivering high‑quality solutions and robust harvest‑boosting strategies to its target customers. Upholding an innovation‑driven approach, the company continued to increase investment in product development and R&D, strengthened its capabilities in key core technologies, and enhanced its R&D system. In the first half of 2023, R&D expenditures totaled RMB 32.73 million, accounting for 6.75% of total operating revenue.

Limin Shares’ net profit for the first half of the year fell 61.98% year over year.

On August 18, Limin Co., Ltd. released its semi-annual results report, reporting that in the first half of 2023, its operating revenue totaled approximately RMB 2.306 billion, down 17.9% year over year; net profit attributable to shareholders of the listed company was about RMB 57.53 million, a year-on-year decrease of 61.98%; and basic earnings per share stood at RMB 0.15, down 63.41% from the same period last year.

During the reporting period, the company proactively addressed the impact of cyclical industry fluctuations and depressed price levels, ensuring the smooth and orderly execution of sales, production, and other operational activities. Both product output and sales volume increased significantly year over year, rising by 42.56% and 31.52%, respectively. The company’s gross margin improved by 0.67 percentage points compared with the same period last year. However, the profit‑reducing effect of lower market prices outweighed the profit‑boosting effects of higher sales volumes and reduced costs, resulting in a decline in both operating revenue and net profit. In the first half of 2023, the company reported operating revenue of RMB 23,059.50 million, down 17.90% year over year, and net profit attributable to shareholders of the parent company of RMB 57.53 million, a decrease of 61.98% compared with the prior-year period.

As of June 30, the company’s accounts receivable, inventory, and debt-to-asset ratio all improved further compared with the same period last year: accounts receivable decreased by 3.11% year over year; inventory declined by 2.93% year over year; and the debt-to-asset ratio stood at 58.79%, down 5.36 percentage points from the prior year.

Jiangshan Shares’ net profit for the first half of the year fell 84.03% year on year.

On August 18, Jiangshan Shares also released its 2023 semi-annual report. During the reporting period, the company reported a net profit attributable to shareholders of RMB 194 million, down 84.03% year over year; operating revenue totaled RMB 2.673 billion, a decrease of 48.91% compared with the same period last year; and basic earnings per share were RMB 0.4423, down 84.29% year over year.

In this regard, Jiangshan Shares stated that the decline was attributable to a substantial drop in both the market price and sales volume of its principal pesticide product, glyphosate, during the reporting period.

Changqing Co., Ltd. reported a 14.48% year-on-year decline in net profit for the first half of the year.

On August 15, Changqing Co., Ltd. released its semi-annual report, reporting that in the first half of 2023, the company achieved operating revenue of RMB 2.004 billion, down 5.90% year over year. Net profit attributable to shareholders of the listed company totaled RMB 173 million, a decrease of 14.48% compared with the same period last year. Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses, stood at RMB 176 million, down 12.87% year over year. Basic earnings per share were RMB 0.2656.

During the reporting period, the company actively pursued market opportunities and secured orders, resulting in steady growth in its direct‑sales business. By prioritizing safety and strengthening environmental management, the company effectively unlocked nearly all of its production capacity. Additionally, the company advanced the construction and commissioning of the Changqing Hubei Production Base: the 10,000‑ton‑per‑year technical grade isopropylamine‑chloroacetamide project has entered full production, while the 1,000‑ton‑per‑year bifenthrin technical grade and the 2,000‑ton‑per‑year florasulam technical grade projects have commenced trial production.

Nongshim Technology’s net profit for the first half of the year fell 34.96% year over year.

Recently, Nongshim Technology released its 2023 interim report. During the reporting period, the company recorded operating revenue of RMB 375 million, down 3.16% year over year. Net profit attributable to shareholders of the listed company amounted to RMB 42.4841 million, a decrease of 34.96% compared with the same period last year. Net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses, stood at RMB 40.257 million, down 34.18% year over year. Basic earnings per share were RMB 0.42.

Among these, fungicides accounted for RMB 120 million, down 18.23% year over year; insecticides totaled RMB 136 million, up 1.04% year over year; and herbicides reached RMB 86.06 million, an increase of 27.3% year over year. During the reporting period, the company’s R&D expenditure amounted to RMB 17.41 million, up 47.3% year over year. As of the end of the reporting period, the company and its key subsidiaries held 290 pesticide registration certificates, 206 invention patents, and 16 design patents.

Hongdongfang’s net profit for the first half of the year fell 70.48% year over year.

Recently, Hongdongfang released its 2023 semi-annual report, reporting that during the reporting period, the company recorded operating revenue of RMB 712 million, down 37.84% year over year; net profit attributable to shareholders of the listed company amounted to RMB 137 million, a year-on-year decrease of 70.48%; and net profit attributable to shareholders of the listed company, excluding non-recurring gains and losses, stood at RMB 129 million, down 71.95% year over year.

Hongdongfang stated that, in the same period of 2022, glyphosate technical‑grade prices were relatively high, resulting in a year‑over‑year decline in both sales revenue and profit from glyphosate technical grade. The year‑over‑year decrease in the company’s operating revenue was primarily attributable to a substantial drop in product prices compared with the prior year, while the year‑over‑year reduction in net profit was mainly due to a decline in operating profit.

Guoguang Shares’ net profit for the first half of the year increased by 20.11% year over year.

On August 7, Guoguang Co., Ltd. (002749) released its 2023 interim report. For the period January–June 2023, the company reported operating revenue of RMB 954 million, up 8.94% year over year; net profit reached RMB 169 million, a 20.11% increase compared with the same period last year; and after excluding non-recurring items, net profit still stood at RMB 163 million, up 24.67% year over year.

Overall, in the first half of this year, Guoguang Shares’ product gross margin and net profit margin both increased compared with the same period in 2022. The expansion of product profitability was primarily driven by fluctuations in upstream raw material prices. In addition, a rise in the company’s product sales volume also contributed positively to its earnings growth.

Baisimei’s net profit for the first half of the year increased by 5.1% year over year.

In the first half of 2023, Baisimei reported a net profit attributable to shareholders of RMB 78.56 million, up 5.1% year over year; its non‑GAAP net profit reached RMB 75.04 million, an increase of 4.89% compared with the same period last year; its gross profit margin stood at 40.36%, up 10.46 percentage points year over year; and its revenue totaled RMB 363 million.

During the reporting period, Besimei’s pendimethalin technical grade, pendimethalin formulations, and agrochemical intermediates were the company’s primary market‑oriented products. As a leading player in the pendimethalin sector, the company has continuously optimized production processes for core products such as pendimethalin, enhancing product quality and further strengthening its competitive edge.

The semi-annual report shows that, during the reporting period, Bailimei’s R&D expenditure reached RMB 19.5981 million, up 6.78% year over year, and this substantial increase in R&D investment has yielded tangible results.

Lvheng Technology’s net profit for the first half of the year increased slightly by 0.58% year over year.

On August 21, Lvheng Technology, a company specializing in vegetable seeds, released its 2023 interim report, which showed that during the reporting period, the company recorded operating revenue of RMB 184 million, down 5.45% year over year. Net profit reached RMB 26.98 million, up 0.58% compared with the same period last year.

Lvheng Technology reported that, during the reporting period, fertilizer revenue increased significantly, reaching RMB 10.2505 million, up RMB 3.3175 million, or 47.85%, year over year. This growth was primarily driven by the company’s fertilizer business being in a phase of rapid expansion; during the period, the company strategically developed new products, resulting in robust performance. Revenue from other product lines totaled RMB 1.7959 million, an increase of RMB 544,200, or 43.48%, compared with the same period last year, largely attributable to the company’s efforts to extend its vegetable seed value chain and expand sales of fruit and seedling products.

Source: Company Announcement