Event: the company released its semi-annual report for 2021, with operating income of 917 million yuan during the reporting period, down 2.03% from the same period last year; net profit belonging to shareholders of listed companies was 530 million yuan, down 2.82% from the same period last year; and basic earnings per share was 0.86 yuan, down 3.37% from the same period last year.
Due to the repeated influence of the epidemic, the overall downstream demand was frustrated, paying attention to the landing opportunity of HNB during the 2021H1 reporting period, due to the adverse effects such as repeated epidemic situation and rising prices of raw materials, the overall downstream market demand and product structure were adjusted, and the company's overall revenue decreased slightly. H1 edible flavor plate achieved revenue of 804 million yuan, a decrease of 4.83% compared with the same period last year. The revenue of food ingredients business increased by about 28.53%, while the revenue of daily flavor business increased by 11.56%, mainly due to the company's increase in product matching for key customers and the development of multi-product lines to meet different customer needs. In a single quarter, 2021Q2 achieved revenue of 450 million yuan, down 8.33% from the same period last year and 3.76% from the previous year; the net profit from home was 256 million yuan, down 7.42% from the same period last year, and 6.57% from the previous quarter, mainly due to changes in downstream customer demand and product structure. We believe that while traditional tobacco flavors are developing steadily, HNB flavors have higher technical requirements than traditional cigarette flavors, and the company has also carried out R & D layout for HNB special flavors, and we believe that the company's flavor business may continue to supply the China Tobacco Industry Company with a layout in HNB in the HNB era, linkage with overseas markets, and is expected to share the rapid development dividend of the new global tobacco industry.
Obvious advantages of R & D barriers to maintain high profitability
In terms of profitability, the gross profit margin of 2021Q2 sales was 71.11%, down 4.76pct from the same period last year; the net profit margin of sales was 57.64%, an increase of 0.06pct over the same period last year. Overall, the company's profitability remains at a high level. We believe that, as the leader of domestic tobacco flavor, the company has significant advantages in technology and scale and high product barriers, which has laid the foundation for strong profitability and revenue sustainability in the medium to long term.
The company is expected to benefit from the upgrading of tobacco flavor and edible flavor consumption.
Consumption upgrading makes the demand for high-quality tobacco flavors more obvious, and high-end cigarettes put forward higher requirements for the quality and blending technology of tobacco flavors. companies that produce high-quality tobacco flavors and have their own patented technology will share the change dividends brought about by cigarette consumption upgrading and new tobacco demand. Benefiting from the barrier advantage of the flavor industry and the high gross profit margin of the tobacco industry, the gross profit margin and net profit margin have been maintained at a high level, with an average of about 76.6% and 54.3% respectively in the past five years, leading the profitability industry.
Profit forecast and investment suggestion
We estimate that the company's revenue from 2021 to 2023 will be 2.215kg 2.381 billion RMB, and its net profit will be 12.47pm 1.324 billion RMB 1.406 billion. Based on the company's leading advantage in the tobacco flavor industry and the characteristics of high gross profit margin, the company will maintain its "buy" rating.
Risk hint: development is not as expected, policy risk, fund-raising project construction is not as expected