Yangnong Chemical (600486 CH) Buy: Weathering the margin cycle; poised for volume-led growth

研报英文原文证据摘录

Yangnong Chemical (600486 CH) Buy: Weathering the margin cycle; poised for volume-led growth

8 June 2026

Equity Research Report

Equities Yangnong Chemical Chemicals

(600486 CH)

Buy: Weathering the margin cycle; poised for volume-led growth China

◆ Lower 2026-27e profit estimates on a milder GPM recovery

MAINTAIN BUY

as sequential price weakness is expected in 2H26e

◆ Long-term growth underpinned by new launches of high-end TARGET PRICE (CNY) PREVIOUS TARGET (CNY)

products and the Huludao capacity expansion 70.30 87.00

◆ Maintain Buy and lower TP to RMB70.30 from (RMB87.00) SHARE PRICE (CNY) UPSIDE/DOWNSIDE

58.44 +20.3%

Lower estimates on a weaker expected GPM recovery. 1Q26 net profit missed our (as of 03 Jun 2026)

estimate due to the lower-than-expected GPM of active ingredients, driven by a

larger-than-expected drop in product prices. Previously, we expected that a policy- MARKET DATA

Market cap (CNYm) 23,616 Free float 58%

driven accelerated market consolidation would drive up pesticide prices and margins Market cap (USDm) 3,489 BBG 600486 CH

from 2026e. However, the price increases since March have been primarily driven by 3m ADTV (USDm) 68 RIC 600486.SS

cost inflation and seasonal demand, with minor changes on the supply side. We

FINANCIALS AND RATIOS (CNY)expect a milder GPM recovery in 2026-27e versus our previous estimates, as the Year to 12/2025a 12/2026e 12/2027e 12/2028e

downstream acceptance of price hikes of active ingredients is limited to on-demand HSBC QH EPS 3.19 3.80 4.27 4.88

orders, while product prices still face pressure from oversupply. Therefore, we lower HSBC QH EPS prev 3.60 4.58 4.95 NA

Change (%) -11.3 -16.9 -13.7 NA

our 2026-27e net profit estimates by 14-17%; we introduce our 2028e estimates. Consensus EPS 3.30 3.97 4.58 5.12