8 Cotton Stocks Will Be Released In The Near Future.

Reporters learned from authoritative sources that the eight ministries and commissions of the national development and Reform Commission will release the plan for the temporary storage and purchase of cotton in 2013 by the end of this month and early March. The starting date of 2013/14 will be in September 1st this year and end in March 31, 2014. Insiders expect that the purchase or storage price will maintain the level of 20400 yuan / ton in 2012.

Analysts pointed out that the new year's purchase and storage price is stable, which is conducive to domestic cotton. Spin The recovery of international competitiveness of enterprises. Affected by the continuing uplink of international cotton prices, the difference between cotton prices inside and outside the country is also narrowing. It is recommended to pay attention to Lu Tai A, Xinye textile and Huafu color spinning. In addition, the resumption of start-up of downstream cotton textile enterprises will stimulate demand for other blended raw materials. The viscose staple fiber that has continued to rise since the end of last year is the main beneficial variety. Australia ocean technology, Nanjing chemical fiber and Sanyou chemical industry deserve our attention.

　 Storage and purchase plan will be announced

The acquisition and storage of 2012/13 is coming to an end. The cotton purchase and storage plan for 2013/14 is expected to be launched in the near future. Cotton reserves information, as of February 26th, has accumulated acquisition of temporary storage and storage of 6 million 195 thousand and 700 tons of cotton.

Data show that cotton production in 2012 was 7 million 164 thousand tons, which was basically unchanged from the output of 7 million 236 thousand tons in 2011. Market participants expect that the new cotton purchase plan or fixed price will be partially purchased in the new year, so that not only can we control the reserves, reduce the pressure of the main body, but also support the cotton farmers properly. If the State Reserve purchase is set at 4 million tons, there will be little cotton in the market and the impact on the market will be close to the current level. If the State Reserve purchase is set at 3 million tons or less, the market will be more negative.

The amount of cotton purchased by the State Reserve in the new year will be determined according to the amount of storage this year. This year's first round of national cotton reserves will end in March 31st. Cotton information network latest news, as of 26 days, 2013 national storage cotton has accumulated out of stock 546 thousand and 300 tons.

Promotion of downstream competitiveness

According to statistics of the General Administration of customs, China's textiles in January of this year clothing Exports of US $24 billion 690 million, an increase of 14.7% over the same period last year. 2012 cotton year, China's textile and apparel exports totaled $117 billion 640 million, an increase of 10.7% over the same period last year.

Insiders pointed out that the stability of domestic purchasing and storage prices in 2013 is conducive to the upgrading of domestic cotton textile enterprises' competitiveness and the resumption of start-up. The more important message is that the international cotton prices continue to rise in the near future, and the subsequent international cotton prices have a further upward trend, which is stimulated by the US's intention to grow in 2013, which is 26.8% lower than that in 2012. For cotton textile enterprises, the domestic and international cotton prices will be narrowed and the international competitiveness will be restored. For the replacement of textile raw materials, downstream cotton textile enterprises start to resume, will stimulate the demand for other blended raw materials, viscose staple fiber is the main beneficiary species.

In addition, the cotton planting area is expected to decrease this year, and there will be a warmer demand for cotton in the supply of raw materials or inadequate demand. According to customs data, China imported 457 thousand tons of cotton in January, an increase of 131 thousand tons compared with the same period last year, an increase of 40.1%.

New Sai shares

The company is a state-level leading seed enterprise with high quality seed and high quality cotton industrialization. Its location has unique soil, climate, water and photothermal resources, which is very suitable for the growth of cotton crops. Over the past three years, the average cotton yield of the company has been higher than the world average. The average annual yield of cotton is about 240 thousand mu, the total output of lint is about 30 thousand tons, and the production and sale of high-quality cotton seeds is about 7000 tons. The production mechanization degree of the company is more than 85%, and it ranks first class in the application of water-saving technology of drip irrigation. At present, drip irrigation area accounts for 90% of the cotton planting area. It is one of the largest water-saving irrigation districts in China.

　　 *ST new farmers

The company's Akesu area is one of the important commercial cotton production bases in the country. It is also the largest commercial cotton production base in Northwest China. The region is rich in long staple cotton agriculture, and the company has the advantage of developing the cotton industry. The company is a leading national leading enterprise in agricultural industrialization, and also the first cotton concept listed company in China. Enjoy corporate income tax relief and other related policy support and preferential treatment. At present, the cotton planting area is about 250 thousand mu, with annual output of about 35 thousand tons of lint. In the 08 year, the total output of cotton is 41 thousand and 400 tons, accounting for 0.56% of the total output of the country, accounting for 1.38% of Xinjiang's output.

Guan Nong stock

The company that produces cotton is listed as the largest cotton concept stock. Its main products are cotton, fruit and vegetable, sugar and other agricultural products. The profit in recent two years and future mainly comes from the investment income of the Xinjiang Lop Nor potash limited liability company (referred to as the national investment potassium). At present, Guan Nong shares owns 20.3% of Luo Chi. DHL is located in Lop Nor, Xinjiang. It is the largest potassium sulphate production enterprise in China. It is running a 100 thousand ton / year small device. The actual output can reach 120 thousand tons / year. The first 1 million 200 thousand ton / year project will be put into operation by the end of the year, and the total capacity will expand to 3 million tons / year in the future. It will become the largest potassium sulfate production enterprise in the world. Net profit attributable to parent company owners increased significantly in 2008 1-9.

{page_break}

　 Dunhuang seed industry

The company is the key leading enterprise of agricultural industrialization, producing 100 million kilograms of crop seeds annually, ranking the top 4 in seed production and sales. At present, there are 7 seed processing enterprises, 6 cotton processing enterprises, and the total processing capacity of seeds and cotton is 65 thousand tons and 70 thousand tons respectively. The scale advantage of the company is obvious. The two major industries have 5 seed industry bases, including 20 thousand acres of vegetable seed production, 130 thousand mu of corn seed production base, 400 thousand acres of cotton and 80 thousand mu of strong gluten wheat. With the continuous expansion of the scale of the company and the continuous improvement of its varieties, the cost advantages brought by the industrial operation will become more and more obvious, and the business revenue will also continue to improve.

Xinjiang Tianye

At present, the company is the only listed company with large quantities of tomato and cotton planting at the same time. The days of harvest, sale and settlement are concentrated in the fourth quarter and the first quarter of next year, with obvious seasonal characteristics. The annual output of 70 thousand tons of tomato paste is exported to 40 countries and regions, such as Asia and Europe. The company is the second largest tomato sauce export enterprise after Xinjiang Tuen river. (08) the sales of tomato paste business is 249 million 591 thousand and 200 yuan, gross profit margin is 36.86%, and the yield of cotton can reach 100 kg, reaching the world's advanced water. In addition, the company's "million mu drip irrigation under the new and high technology agricultural development project" has been listed as a key project of the western development. The company's main product water-saving irrigation equipment occupies 70% of the market share in Xinjiang, with annual supply capacity of 5 million mu of plastic water-saving equipment, and the promotion area of Tianye water saving equipment has reached 3 million mu, which has laid the leading position in the whole country.

Ya Sheng group: equity incentive is conducive to the smooth transformation of modern agriculture.

Category: Company Research Institute: SW securities Limited by Share Ltd research fellow: Zhao Jinhou date: 2012-12-07

The company announced the equity incentive plan: the company intends to grant incentives to 10 million 561 thousand and 400 A share options, accounting for 0.54% of the total share capital, and the exercise price is 5.97 yuan. The stock option granted by the plan can be divided into 3 years' fixed rights according to a fixed proportion after 2 years from the date of authorization. The terms of the plan are: the net profit after deduction is not less than 321 million yuan in 2012, and the net assets yield is not less than 9%. If the performance is satisfied with the award conditions in 2012, the exercise period of the plan is 2015, 2016 and 2017 respectively. The exercise conditions are: the net profit attributable to the parent company in 2014-2016 years is not less than 30%, 22% and 18% in 2012, and the net assets yield is no less than 10%, 10.3% and 10.5% respectively.

Equity incentive is conducive to mobilizing the enthusiasm of key personnel and ensuring the smooth implementation of plans for the promotion of unified business models and expansion of arable land. The total number of incentives was 148, accounting for 2% of the total number of employees. There were 6 directors and executives, and 142 core business, technology and management staff. The company is in a breakthrough period from "traditional agriculture" to "modern agriculture" mode. At this point, the introduction of equity incentive plan will make the interests of major shareholders, executives and grass-roots personnel in line with each other, so as to provide protection for the follow-up company's development strategy. At the same time, the compound growth rate of performance in the exercise conditions is higher than the company's historical level, highlighting the company's confidence in the future performance and the determination of the transformation of the business mode.

The expansion of cultivated land and the transformation of management mode drive the sustained growth of achievements: (1) the continuous expansion of planting area: the company has 3 million 420 thousand mu, of which 475 thousand mu is cultivated land, the rest of the land includes: 480 thousand mu of uncultivated land, 1 million 850 thousand mu of pasture area, and 600 thousand acres of other land. It is estimated that in the 12-14 years, the cultivated area of the company will expand to 55/62/70 mu. If the parent company will have 4 farms competing with each other, it will add more than 30 mu of cultivated land. (2) transformation of business mode to raise the value of cultivated land resources and raise the average profit per mu: unified management mode intensification of cultivation and management of arable land. Through reasonable adjustment of cropping structure and scientific means to increase yield per unit area and product quality, the value of cultivated land resources and production efficiency can be significantly improved: the company's unified operation has an average profit of about 1000 yuan per mu, while the traditional household contract mode has a profit of only about 200 yuan per mu. We expect that the cultivated land area of "unified operation" in the 12-14 years is 27/42/50 Mu respectively, and the average profit per mu of the company's cultivated land is 546/773/845 yuan per mu, and its value is increased by 54.7%. In addition, the company is actively promoting the operation mode and drip irrigation technology to the outside of the province to become a potential growth point for the company's future performance.

Investment recommendations: maintain "buy" rating: according to the above assumption of cultivated land area, it is estimated that the net profit of the parent company will be 4.19/5.23/6.66 billion yuan in the 12-14 years, EPS0.22/0.27/0.34 yuan, and the net growth rate of main industry net profit will be 43%, corresponding to PE28/22/17 times in three years. With the promotion of the "unified management" mode, the value of cultivated land resources is maximized and the benefit of planting is significantly improved. In addition, the company's cultivated area is expected to continue to expand, and we maintain the "buy" rating.

The catalyst for stock price performance is that the rate of cultivated land expansion is faster than expected; the price of agricultural products is rising; other resources of farms are allowed to be developed; and the relevant policies such as "modern agriculture" or "land circulation" are promulgated.

Core assumption risk: "unified management" area expansion is lower than expected; agricultural products prices fell sharply.

　 *ST medium base

Agricultural cultivation, processing and marketing of agricultural and sideline products, livestock breeding, slaughtering, processing and marketing, breeding of fine seeds, raising and grazing of livestock, cotton management, cotton processing (only the two flower factories that the company belongs to), grain and oil processing, agricultural machinery repair and construction, mechanical and electrical products, metal materials, building materials, five products, office supplies and clothing. shoes The sale of hats, needles and textiles, other foods (except wine and liquor), arts and crafts, decoration engineering construction, barter trade and three to one supplement business in the former Soviet Union, Eastern Europe and other neighboring countries, the import and export business of self run and agent corps, automobile operation and wood processing. Hold an economic and trade exhibition abroad. Land and housing lease.

{page_break}

　 The worst time for a: is over.

Research Institute: Guo Hai securities analyst: Liu Jinhu's writing date: 2013-01-31

The order situation has improved compared to 2012. From the order cycle period, the company's yarn dyed fabric orders were received in April and the shirts order was received in May. The order period was about 3 months. Compared with the worst case in 2012 (about 1 months), the normal order period has been restored. According to the order structure, the export orders of the companies in China, Europe and Japan account for 1/3 of the total under normal circumstances. In the case of European orders declining by 30% in 2012, the company has made full load production, and has taken orders to increase the volume of orders in India and Turkey to ensure the total amount of orders, but to a certain extent, it will damage gross margins.

Cotton prices into stable areas, gross margin improvement will become the theme of 13 years. The raw material of the company's cotton is long staple cotton (the cost accounts for about 50%), and the cotton reserve cycle is usually 3-6 months. Cotton prices fell sharply in the first half of 2011, and cotton prices entered a stable range in August 2011. Due to a certain lag in the gross profit margins and the rise and fall of cotton prices, gross margins rose gradually after the first quarter of 2012. If cotton prices are on a moderate recovery in 2013, the gross profit margin of the company will probably increase gradually in the 13 years.

The new production capacity is the growth base for the next two years. As a manufacturing enterprise, the new capacity is one of the driving forces of the company's performance growth. In the two quarter of 2012, the company delivered 20 million Beige weaving and 25 million meter piece dyed fabrics, respectively. At present, the production capacity of dyed fabrics, dyed fabrics and shirts is 170 million meters, 75 million meters and 20 million pieces respectively. If the market demand is better than expected, the company will have 20 million Beige weaving (2013 H2) and 26 million dyed fabrics (2014) production capacity in the next two years. If the production is progressing smoothly, by the end of 2014, the production capacity of the company's yarn dyed fabrics, dyed fabrics and shirts will reach 190 million and 110 million meters respectively, representing an increase of 30% and 83% respectively compared with the end of 2011.

Earnings forecast we believe Cotton price The consequences of the sharp rise and fall and the weak demand for overseas demand in 2012 are over. In the first quarter of 2013, the performance will be better because of the low base number. Looking forward to the whole year, with the rebound of overseas demand and stable cost support, the company's order structure and quantity and gross profit margin will be improved. Our hypothesis is based on: 1) the international macro economy in 2013 will be better than that in 2012, the US recovery will continue to push forward, the company will pick up the link, and 2) the company's expansion plan will be carried out smoothly, the 20 million half Beige weaving will be added in the second half of the 13 year, and 25 million meters of dyed cloth will be added in the two quarter of the 14 year; 3) the domestic cotton price will remain stable, and the sharp fall in 2010 will not happen. Forecast Ltd in 2012 -2014 EPS were 0.63 yuan, 0.78 yuan and 0.86 yuan, the current stock price corresponding to 12-14 years PE 11 times, 8.6 times and 8 times, for the first time to give "overweight" rating.

Risk hints: overseas demand recovery is lower than expected, 2013 and 2014, the risk of new capacity can not be released on time, and the risk of increased cotton price volatility.