Guoguang Agrochemical: Promoting entire crop solution process to reach planned coverage of crop fields from 1 to 1.5 million mu in 2024

Guoguang Chemical Co., Ltd., a leading Chinese plant growth regulator enterprise, is one of the few agrochemical enterprises in China that can maintain growth revenue and profitability in 2024. Recently, the company held an investors’ event to reply to their questions about its operating performance, market layout and crop solution promotions in 2023 and the first quarter of 2024, as well as its operations targets.

Guoguang Chemical’s operating performance in 2023 and the first quarter of 2024

In 2023, the company’s operating income was RMB1.859 billion yuan, a year-on-year increase of 12.82%, which includes pesticide revenue at 68.29%, a year-on-year increase of 10%, and fertilizer revenue at 26.27%, a year-on-year increase of 23.09%. Its consolidated gross profit margin was 41.54%, a year-on-year increase of 3.67%, and its gross profit margin of pesticides was 43.91%, a year-on-year increase of 4.38%. The company’s gross profit margin for fertilizers was 35.62%, a year-on-year increase of 3.25%. The net profit attributable to the parent company was RMB302 million, a year-on-year increase of 165.89%.

In 2024, the company’s operating income in the first quarter was RMB366 million yuan, a year-on-year increase of 9.25%; its net profit attributable to the parent company of the listed company was RMB68 million yuan, a year-on-year increase of 24.24%; and its net profit attributable to the parent company of the listed company after deducting non-recurring gains and losses was RMB66 million yuan, a year-on-year increase of 23.55%.

What are the advantages offered by Guoguang Chemical compared to competitors within the industry sector?

Firstly, the product range of the company covers many crops and various growing stages of crops, providing users with rich crop solutions and increasing the loyalty of distributors and users to the company.

Secondly, the company possesses strong application technologies and technical services, and can provide satisfactory field technical services with more depth and in a more specific and more effective manner, which can solve the issues facing plantation management and better meet customers’ needs.

Thirdly, the company has its distinctive distribution advantage, and has more than 5,800 distributors and more than 20 warehouses across the country, ensuring timely product delivery and application in favor of users.

Fourthly, the company has a profound brand advantage, as it is focused on the research and production of plant growth regulators, being a renowned enterprise since its early presence in the plant growth regulator industry sector in China.

Please brief us about the company’s entire crop solution process and how will it be promoted in 2024?

The entire crop solution process is an optimized and upgraded solution based on a  conventional solution, which will improve service quality to meet customers’ higher requirements. It also aims to adopt an advantageous marketing mix for potential customers to expand their resources. The company’s whole crop solution process and crop regulating techniques are new measures aimed at serving growers through adapted crop plantation management, which will better serve growers and help them achieve the goal of crop quality improvement and yield increase.

This year, the company has determined that the promoting its entire crop solution process can be focused on field crop producing regions, which are mainly the provinces of Shandong, Henan, Hebei, and Xinjiang. From the start of the year to present, the process has been promoted primarily for spring crops, including cotton, peanut, corn, and rice. So far, interests have been shown after promotional demonstrations and trade fairs, which aim to apply the process to some 500,000 mu of fields. The company is planning to reach a coverage of crop field of between 1 million and 1.5 million mu this year.

The process is implemented jointly by the company’s technical marketing team, distributors, and retailers, who have specific duties within their respective job designations in a cooperative manner. Technical services comprise field patrols and online real time services, therefore, linking farmers in real time to help them solve problems encountered in a timely manner during crop management.

What is the company’s target operating revenue in 2024?

The company aims for a 20% year-over-year growth in 2024. The first quarter is the low season of agricultural production, which combined with the repeated effects of climate change in the first quarter of this year, have impacted the application of agricultural inputs. Currently, in this second quarter during the peak season of agricultural production, the use of agricultural inputs will reach its peak period, for which the company is fully prepared to continue to increase its technical services in accordance with relevant requirements, to promote the whole crop solution process and crop regulating technique, which will enable the company to achieve its annual goals.