The only full-category functional sugar leading enterprise in China, the global sugar reduction trend ushered in the development opportunity. The company's main products include functional sugar series, sugar alcohol series, dietary fiber series, starch and starch sugar series, pharmaceutical raw and auxiliary materials series and probiotic terminals, etc. widely used in health food, functional drinks, health medicine, non-anti-feed, daily chemical and other fields. Under the global trend of reducing blood sugar, we believe that the company's profitability is expected to continue to increase. 1H2021 achieved revenue of 1.262 billion yuan, an increase of 24.1% over the same period last year, and a net profit of 65 million yuan, an increase of 48.74% over the same period last year. Of this total, 2Q2021 achieved revenue of 707 million yuan, an increase of 14.78% over the same period last year, and a net profit of 56 million yuan, an increase of 89.7% over the same period last year.
Main functional sugars, including functional oligosaccharides, functional dietary fiber, functional sugar alcohols. Functional oligosaccharides, also known as "probiotics", have the functions of not being digested and absorbed by the human body, promoting the increase of beneficial bacteria, protecting intestinal immune mechanisms, and so on. Functional dietary fiber is a kind of high molecular carbohydrate, which can not be digested and absorbed by the human body normally, can slow down digestion speed and the fastest excretion of cholesterol, and can also help patients with diabetes to reduce insulin and triglyceride. Functional sugar alcohols are mainly erythritol, which has the characteristics of natural, zero calorie, not involved in blood glucose metabolism, high tolerance and stable acid-heat performance.
The demand for erythritol continues to grow, and the company's production capacity is accelerated. Erythritol is the only sugar alcohol product prepared by natural transformation and extraction by biological fermentation in the market, and it is a 0-energy sugar alcohol product recognized by the National Health and Family Planning Commission. According to the forecast data released by Sullivan in the company's non-public offering report, the total global demand for erythritol will exceed 140000 tons in 2021, with a broad market space. The company seizes the opportunity of the industry and plans to invest in the construction of the "annual output of 30,000 tons of erythritol crystal project". After the project reaches production, the company's erythritol production capacity will be further improved, and the company will continue to maintain its competitive advantage in the field of erythritol products.
Aloxone sugar field preemptive layout, consolidate the leading position. Aloxetose is a new generation of healthy sweetener in functional sugar, which has similar taste and volume characteristics to sucrose, can also reduce the absorption rate of glucose, fructose and other sugars in the small intestine, and reduce the accumulation of fat in the human body. it can be used in food, health care and medical fields. According to FMI research data cited by Dajing.com, the global aloxanose market will reach 210 million US dollars by the end of 2020 and is expected to maintain rapid growth in the future. The company is one of the earliest enterprises to arrange aloxone sugar project in China, and the export of aloxone sugar reached 1.1215 million yuan in 2020. The company is optimistic about the prospect of aloxetose and plans to invest in the construction of the "annual production of 30,000 tons of aloxanose (dry base) project" as an important reserve of functional sugar core products. We believe that the company's performance is expected to rise to a higher level after the project is put into production.
Profit forecast and valuation range. We estimate that the EPS of the company from 2021 to 2023 will be 0.39,0.56,0.73 yuan per share respectively. Combined with the comparable company valuation, we will give it 42-45 times PE in 2021, corresponding to a reasonable value range of 16.38-17.55 yuan.
Risk hint. The price of fructose syrup fell, the demand for erythritol was lower than expected, and the demand for aloxone was lower than expected.