Event: the company released its semi-annual report for 2021. During the reporting period, the company achieved a total operating income of 1.262 billion yuan, an increase of 24.10% over the same period last year, and a net profit of 64.5453 million yuan for shareholders belonging to listed companies, an increase of 48.74% over the same period last year.
Benefiting from the fact that erythritol is in short supply, the company's performance has greatly improved.
Supported by the shortage of supply since the beginning of this year, the price of erythritol continued to rise after the holiday. Benefiting from this, the company's second-quarter performance improved significantly, with a net profit of 55.717 million yuan in the second quarter alone, an increase of 89.70% over the same period last year.
From a product point of view, 21H1 sugar alcohol business income of 255 million yuan, an increase of 22.30% over the same period last year, accounting for 20.24% of the total revenue, is the company's largest business segment. At the same time, sugar alcohol gross profit margin increased to 26.82%, an increase of 5.15pct over the same period last year, which has become the most important factor in the company's performance improvement. Among the other major products, functional sugar business was 235 million yuan (up 34.23% over the same period last year), other starch sugars was 239 million yuan (up 22.71% over the same period last year), and fructose syrup was 243 million yuan (up 27.57% over the same period last year).
The overall gross profit margin is relatively stable and the cost control is excellent.
Despite the large increase in the price of raw materials, the gross profit margin of the company's main business remained relatively stable, benefiting from the sharp increase in sugar and alcohol prices, with a gross profit margin of 10.80% in the first half of the year, lower 0.88pct compared with the same period last year. Among them, gross profit margin of sugar alcohol business is 26.82% (year-on-year increase of 5.15pct), functional sugar margin is 16.90% (year-on-year decrease of 5.81pct), gross profit margin of other starch sugars is 8.48% (year-on-year increase of 1.63pct), and gross margin of fructose syrup is 0.36% (year-on-year decline of 4.90pct). In terms of expenses, the overall management and control of the company is relatively excellent, and the expense rate has declined, with the sales expense rate of 1.44% (down 0.06pct year-on-year), management expense rate of 3.31% (year-on-year decline of 0.89pct), and financial expense rate of 0.48% (year-on-year decline of 0.07pct).
The company has outstanding competitive advantages and is expected to fully benefit from the general trend of reducing sugar.
As a leader in the functional sugar industry, we believe that the company's core advantages come from three aspects: 1) R & D innovation advantages: the company leads the industry in R & D investment level, participates in the formulation of more than 20 industry standards and 1 international standard, and holds the voice of the industry. 2) the advantage of the whole industry chain: the company is the only manufacturer and service provider of all-product functional sugar products in the domestic market. after the new production capacity is completed, the production capacity of erythritol will reach 60,000 tons, and the production capacity of aloxone sugar will reach 30,000 tons. Fully meet the growing needs of downstream customers 3) Brand and market advantages: over the years, the company has continuously strengthened the ability of key customer marketing and program marketing, tailored solutions for customers, and strong customer stickiness.
Profit Forecast and Investment suggestion
Regardless of additional equity dilution for the time being, it is estimated that in 2021-2023, the net profit of return to the mother will be RMB 290 million, compared with the same period last year. 302%, 47%, 28%. Considering the rapid growth of the company's future performance and referring to the comparable company valuation, it is given a 22-year 30-fold PE with a target market value of 9 billion yuan, corresponding to the target price of 24 yuan, and maintain "buy".
Rating.
Risk tips: downstream customer demand fluctuations; raw material price fluctuations; increased competition in the industry; product sales are not as expected; the risk of approval failure
