Lin Yuan Strikes Again! Targets a New "Food-Related" Stock

Recently, while the market has been buzzing with hot concepts such as mergers and acquisitions, and state-owned enterprise reforms, some relatively niche tracks have also seen an upward trend, such as agricultural chemicals and glyphosate.

As for the related concept stocks, Linyuan Investment, which rarely appears publicly, has also set its sights on one of the targets.

This target not only belongs to the agricultural chemical track but is also related to "eating and drinking," which is also a theme that Linyuan has long been focusing on.

For a long time, there have been few cases of Linyuan Investment appearing publicly to research listed companies, but recently, Linyuan Investment's name appeared in the research list of a listed company.

On August 29, 2024, during an institutional research activity of Nuopuxin, the name of Linyuan Investment appeared among them.

In addition, it was observed that on August 29, in addition to Linyuan Investment, many institutions also conducted research on Nuopuxin, such as Centennial Insurance Asset Management, Shibei Investment, Kaifeng Investment, etc.

Advertisement

Looking further, in addition to August, Nuopuxin also had many research activities in February, April, May, July and other months, among which many institutions also participated.

Statistics show that in the past year, Linyuan Investment has only appeared in research records 5 times, involving 3 companies, in addition to the aforementioned Nuopuxin, including a grain and oil processing company, an online game, AI company.

As one of the few companies that Linyuan Investment has recently researched, what are the "shining points" of Nuopuxin?

From the perspective of the basic situation, Nuopuxin's business areas involve pesticide formulation business, specialty fresh consumption business, etc.

According to the financial report data of the first half of 2024, the revenue proportion of the company's pesticide formulation business and specialty fresh consumption business both exceeded 40%.

For a long time, Linyuan has stated that it focuses on investing in fields "related to eating and drinking," and Linyuan's recent views have indicated that good assets are all related to eating and drinking, and now it is a strategy - "investing in the mouth," and assets related to the mouth are easier to correct.

Food has a shelf life and usually will not have a large amount of inventory backlog.

The same is true for drugs, and the automatic adjustment of enterprises or the market will be very fast.

Nuopuxin's business is also "related to eating and drinking," and the company's specialty fresh business is related to food.

During this research, institutions paid special attention to Nuopuxin's business in blueberries.

Nuopuxin stated that the company's production area in the 2023/2024 production season was about 20,000 mu, and it is expected that the production area in the 2024/2025 production season will be close to 30,000 mu.

The company currently has a contract land area of about 44,000 mu and has been actively looking for new land resources.

The company's performance in the first half of the year has increased, and the blueberry business has made a significant contribution.

In the first half of this year, Nuopuxin achieved a revenue of about 3.4 billion yuan, a year-on-year increase of 33.5%, and achieved a net profit of about 552 million yuan, a year-on-year increase of 63.48%.

Regarding the reasons for the performance increase, the company stated that the company's second growth curve, which is mainly based on the blueberry business, entered the second year of mass production, and the first half of the year was the main output cycle, with a significant year-on-year increase in both revenue and profit.

Recently, the stock price of Nuopuxin has experienced a round of counter-trend rebound, such as from August 26 to September 3, it rose by nearly 20% in 7 trading days.

The industry track involved by Nuopuxin belongs to agricultural chemicals, and looking further into the agricultural chemical product plate, it has shown structural improvement and improvement in performance in the first half of the year due to factors such as downstream market demand.

Statistics of 58 agricultural chemical concept stocks show that 49 of them made a profit in the first half of this year, accounting for more than 80%; 25 of them achieved performance growth, accounting for more than 40%.

Looking at individual stocks, Yuntianhua, Huaren Hengsheng, and Yanhu shares all achieved a net profit of more than 2 billion yuan in the 2024 mid-year report.

Xingfa Group, Yangnong Chemical, and Xinyangfeng all achieved a net profit of more than 500 million yuan.

Taking Yuntianhua as an example, according to its 2024 mid-year report, the company achieved a net profit of 2.841 billion yuan in the first half of the year, a year-on-year increase of 6.10%.

The company stated that the performance increase is related to the stable profit of the main products such as fertilizers, polyformaldehyde, and feed calcium.

In the first half of this year, the company's sales volume of many products increased, such as the sales volume of compound (mixed) fertilizers increased by 43.28% year-on-year, and the sales volume of urea increased by 12.05% year-on-year.

Looking at the secondary market, the company's stock price has been in a strong rebound from January to May this year, and has been relatively high since June.

Looking at the performance increase in the mid-year report, companies such as Chuan Jinuo, Jinzhengda, Liugu Chemical, and Hongda shares all achieved double growth in net profit in the first half of the year.

Taking Hongda shares as an example, the company achieved a revenue of 1.762 billion yuan in the first half of the year, a year-on-year increase of 21.12%; it achieved a net profit of 58.343 million yuan, turning a loss into a profit, with a year-on-year increase of 187.7%.

The company's performance increase is related to the market side being good.

For example, in the phosphate industry, Hongda shares stated that the market supply and demand in the spring plowing season was tight, the company's compound fertilizer product orders were sufficient, and the orders for phosphate series products increased significantly.

Affected by the significant increase in the sales volume of phosphate series products and the decline in the cost of main raw materials, the operating performance increased by a certain margin.

Looking at the secondary market, the company's stock price has been in a shock upward trend that is different from the market over a longer period of time, such as since 2023, the company's stock price has doubled.

In addition to the aforementioned companies, many agricultural chemical companies also achieved performance growth in the first half of this year, such as Fubang shares, Huaren Hengsheng, Xingfa Group, etc.

Looking at the sub-industry of agricultural chemicals, Nuopuxin also has the layout of glyphosate-related business.

Glyphosate is an organic phosphorus herbicide and belongs to bulk agricultural chemicals, with prices being cyclical.

Recently, some companies have raised the price of glyphosate products.

In addition, looking at the performance of the secondary market, the stock prices of many glyphosate concept stocks have also rebounded recently.

Xingfa Group has recently made a price increase, and the company's main business is the series of phosphorus chemical products, etc.

It recently stated that due to the continuous rise in the price of bulk raw materials recently, the production cost of glyphosate has increased significantly.

The company has issued a price adjustment pre-notification letter to customers and partners on September 1, and decided to increase the sales price of the glyphosate raw materials and series of formulations supplied by the company from September 10, with a price increase range of 5% to 15%.

From July 25 to September 3, the company's stock price experienced a bottom rebound, with a cumulative increase of nearly 18% during the period.

Some companies have increased shipments when the price rises.

Hebang Biology stated that since the second quarter, the prices of the company's main products such as glyphosate have increased to varying degrees, and the gross profit margin of the products in the second quarter has been significantly improved.

The company has seized the opportunity of the market price rebound and increased the shipment volume.

Recently, some glyphosate concept stocks have welcomed a counter-trend trend, such as Huabang Health, whose main business is agricultural chemical new materials, medicine, etc., and the main business of the controlled subsidiary's participating enterprise involves glyphosate.

From the end of July to mid-August, the company's stock price experienced a counter-trend rebound, with the highest increase exceeding 10% during the period.

Some companies have also started to expand production.

Jiangshan shares stated in June this year that the company and Wengfu (Group) signed the "Investment Framework Agreement on Weng'an County New Materials and Electronic Chemicals Project," and the two parties will give full play to their respective advantages to jointly build a circular integrated industrial chain of phosphorus chemical industry.

After the completion of the project, it will add an annual capacity of 100,000 tons of glyphosate and 100,000 tons/year of phosphorus-based flame retardants and related intermediates.

Jiangshan shares' stock price has also recently experienced a counter-trend rebound, such as from August 21 to September 3, the company's stock price increased by more than 16%.