I. Overview of events
On August 19, the company released its semi-annual report of 2021. During the reporting period, the company realized revenue of 1.262 billion yuan, year-on-year + 24.10%, and net profit of 65 million yuan, + 48.74% compared with the same period last year, with a basic EPS of 0.17 yuan.
II. Analysis and judgment
With the rapid growth of revenue and the improvement of operating efficiency, the growth rate of profit side is higher than that of 2021H1 company on the revenue side, which is higher than the revenue / return net profit of 1.62 billion yuan, which is + 24.10% and 48.74% respectively compared with the same period last year. Q2 achieved revenue / return net profit of RMB 707 million in a single quarter, which was + 14.78% and 89.70% respectively in the same period last year. On the revenue side, revenue from major products such as functional sugars and sugar alcohols grew rapidly compared with the same period last year, leading to a year-on-year increase in overall income On the profit side, it benefits from the increase of gross profit margin of products such as sugar and alcohol, and the decline of expense rate during the period, and the growth rate of profit side is higher than that of income side
From a product point of view, 21H1 functional sugars / sugar alcohols / other starch sugars / fructose syrup / by-products / feed products achieved revenue of 2.35exp 2.55exp 2.3933x 1.35x 144m, respectively, compared with the same period last year. + 34.23%, 22.30%, 22.71%, 27.57%, 17.52%, 17.37%, respectively. The income of major sugars and sugar substitutes increased at a high speed compared with the same period last year.
In terms of gross profit margin, 21H1 functional sugars / sugar alcohols / other starch sugars / fructose syrup / by-products / feed products achieve gross profit margins of 16.90% 26.82% 26.82% 8.48% 0.36% 3.35%, respectively, compared with the same period last year-5.81ppt/+5.15ppt/+1.63ppt/-4.90ppt/-0.43ppt/+0.16ppt. Sugar alcohols benefit from the rise in the price of erythritol, and the gross profit margin has increased significantly compared with the same period last year.
Q2 product price rise increases gross profit margin, operating efficiency increases during pressure drop 2021H1 sales gross profit margin is 11.22%, year-on-year-0.49ppt (Q2 is 14.31%, year-on-year + 2.03ppt), due to (1) the implementation of the new revenue criteria, transportation costs are included in operating costs; (3) the gross profit margin of products such as functional sugar fell year-on-year, driving down the 21H1 gross profit margin (2) the price of products such as Q2 erythritol went up and Q2 gross profit margin increased.
The expense rate during 2021H1 is 5.57%, year-on-year-1.05ppt (Q2 is 5.82%, year-on-year-0.62ppt). Among them, the sales expense rate is 1.44%, year-on-year-0.06ppt (Q2 is 1.60%, year-on-year-0.04ppt). The reason is that (1) the new revenue criteria cause transportation costs to be included in costs; (2) the growth rate of cost input is lower than that of income growth, and expenses are effectively diluted.
The management expense rate is 3.31%, year-on-year-0.89ppt (Q2 is 3.39%, year-on-year-0.69ppt), due to a sharp decline in depreciation charges compared with the same period last year. The R & D expenditure rate is 0.34%, year-on-year-0.02ppt (Q2 is 0.35%, year-on-year + 0.05ppt). The financial expense rate is 0.48%, year-on-year-0.08ppt (Q2 is 0.47%, year-on-year + 0.06ppt), due to lower handling charges and improved exchange gains and losses.
The advantage of the whole industry chain is stable, and there is still room for capacity expansion.
At present, the company is one of the few manufacturers and service providers with full-category functional sugar products in the domestic market, with the core technology of functional sugar products and the advantages of the whole industry chain. At present, a complete high, middle and low pyramid product structure of starch-starch sugar-functional sugar-functional sugar alcohol-pharmaceutical raw and auxiliary materials-probiotics terminal is formed. provide a comprehensive range of functional oligosaccharides, functional dietary fiber, functional sugar alcohol applications, products and services.
In terms of new project construction, the company is speeding up the construction of an expansion project with an annual output of 13000 tons of erythritol. The construction of the project began in September 2020, and the production capacity basically met the design requirements by the end of July 2021. The production of this project will further enhance the market share of the company's erythritol products, help to enhance the company's competitiveness, and will have a positive impact on the company's 21H2 business performance.
III. Profit Forecast and Investment suggestions
It is estimated that in 2021-2023, the company's operating income will be RMB 25.35, 29.55 and 2.604 billion yuan, compared with the same period last year, which is + 23.4%, 16.6%, 22.0%, and 273 million yuan, respectively, and the net profit attributable to the listed company is RMB 1.51, 212, and 28.4%, respectively. The corresponding EPS is 0.41, 0.57 and 0.74 yuan, and the current stock price is corresponding to PE, which is 2021 times higher than that of 30-21-17. The company's current valuation is slightly higher than the average valuation of the CITIC agricultural products processing sector by 24 times (Wind consensus expectation, arithmetic average method). Considering the scale advantage of the whole industry chain of the company's sugars and sugar substitutes, and the future erythritol products still have room for capacity expansion, good long-term growth and first coverage, the company is given a "cautious recommendation" rating.
IV. Risk hints
Costs have risen sharply, sales prices of major products have fallen sharply, food safety issues, and so on.