Performance summary: the company achieved operating income of 870 million yuan in the first half of 2021, a decrease of 5.1% over the same period last year, and its net profit was 60.441 million yuan, a decrease of 13.1% over the same period last year. The net profit after deducting non-return was 54.198 million yuan, an increase of 6.6% over the same period last year.
Comments: the decrease in revenue is mainly due to the rapid growth of sales in the biomedical sector affected by the epidemic in the same period in 2020, while pharmaceutical products returned to normal during the reporting period. The company replaces the antibiotic feed additive plate in the "forbidden resistance"
Under the background of the smooth progress of the policy, the company achieved substantial growth; at the same time, the company grasped the actual situation of the rise in feed raw material prices and the growth of pig stocks, and promoted the sales of biological enzyme products to achieve a large increase.
The smooth progress of the prohibition policy has a certain impact on the resistance of livestock and poultry, promoting the growth of the company's product performance. Yidoli is the only domestic production and sales enterprise, and the product has obvious advantages. In order to ensure food safety and promote green breeding, feed production enterprises in China began to ban resistance in July 2020. The extract of Macleaya cordata has the functions of antibacterial, anti-inflammatory, appetizing and promoting growth, can reduce animal diarrhea rate, increase feed conversion rate, and has low toxicity, no drug resistance and no rest period. The company's feed additive income in the first half of 2020 reached 110 million yuan, an increase of 60.6% compared with the same period last year, and is expected to maintain rapid growth in the future. The effective parts of Bopp total alkaloids and their preparations as Chinese veterinary drugs also have high development value in livestock and poultry feed. it can be made into veterinary natural drugs such as antibacterial, anti-inflammatory, liver and kidney protection, which is still in the stage of development. In addition to variety anti-antibiotic products, the company actively develops compound anti-drug products, such as Boyikang, which makes use of the synergistic effect between glucose oxidase and Boluohui powder to improve the efficiency of anti-replacement. And the company signed an agreement on April 27, 2021 to acquire a 29% stake in Shiwei Technology, and the shareholding ratio changed from 51% to 80% after the completion of the transaction.
With high crop prices and higher feed prices, the company, as one of the largest suppliers of feed enzyme preparations, is expected to benefit from downstream demand growth in the future. The enzyme preparation accounted for 300 million yuan in the company's revenue in the first half of 2021, and the feed enzyme preparation was the core product in the enzyme preparation business, including phytase, xylanase and so on. The price of corn remained high. As of the first ten days of August 2021, the average spot price of corn, wheat and soybean meal in China is about 2795 yuan / ton, 2598 yuan / ton and 3700 yuan / ton, respectively, which is higher than the historical level. As the main component of feed raw materials, its price will rise or affect the feed ratio. And the relevant work deployment of feed formula adjustment is mentioned in the "work plan for reducing corn and soybean meal in feed" issued by the Ministry of Agriculture and villages in March 2001. we think that the demand for corresponding digestive enzymes and xylanase may be increased. And the company pays attention to research and development and product renewal, and will further open up the market of ruminant feed additives and aquatic feed enzymes in the future, expand market share, and upgrade existing products to improve production efficiency.
Profit forecast and investment advice. It is estimated that the EPS from 2021 to 2023 will be 0.41,0.56,0.75 yuan respectively, corresponding to the PE of 23-17-12, maintaining the "buy" rating.
Risk hints: downstream demand for Macleaya falls short of expectations, sales of enzyme products fall short of expectations, market recovery of steroidal raw materials is not as expected, and so on.