In the first half of 2021, the company realized operating income of 1.78 billion yuan, + 10.5% of the same period last year, and net profit of 510 million yuan, + 2.4% of the same period last year. Benefiting from the rising volume and price of coenzyme Q10 products and the continued expansion of nutrition and health products, the company's performance has grown steadily. The company gradually enriches the layout of the whole industry chain of nutrition and health products, and is expected to become the forerunner of global nutrition and health. It is predicted that the EPS of the company from 2021 to 2023 is 2.16 pound 2.60 RMB 3.13 yuan respectively. Maintain the target price of $56 and the "buy" rating.
The performance increased steadily in the first half of the year, and the performance of coenzyme Q10 was bright. In the first half of 2021, the company realized operating income of 1.777 billion yuan, + 10.5% of the same period last year, and net profit of 507 million yuan, + 2.4% of the same period last year. Corresponding to the second quarter operating income of 876 million yuan, year-on-year + 8.4%, month-on-month-2.9%; achieve a net profit of 207 million yuan,-25.6%, month-on-month-31.2%. In the first half of the year, the revenue of the VA series reached 339 million yuan,-10.0% compared with the same period last year, and sales volume was 1327 tons, + 1.8% compared with the same period last year. The income of coenzyme Q10 series was 453 million yuan, + 43.9% year-on-year, and sales volume was 174.2 tons, + 23.7% year-on-year. The revenue of nutrition and health products reached 863 million yuan, + 4.1% compared with the same period last year.
VA price pullback year-on-year, rising costs drag on gross margin. In the first half of the year, due to the decline in VA market prices compared with the same period last year, the company's average VA sales price was-11.6% compared with the same period last year. The increase in the price of superimposed raw materials led to an increase in unit cost, with a business gross profit margin of 67.8%, year-on-year-9.5pcts. In the first half of the year, the average sales price of coenzyme Q10 was 2602 yuan / kg, + 16.4% compared with the same period last year, during which the unit cost increased synchronously, and the business gross profit margin was 78.0%, year-on-year-1.7pcts.
In the first half of the year, the company's overall gross profit margin was 52.8%, year-on-year-1.1pcts; net profit margin was 28.3%, year-on-year-2.5pcts.
In the second quarter, the company's single-quarter gross profit margin is 49.4%, year-on-year-6.0pcts; net profit rate is 22.9%, year-on-year-11.8pcts.
VA, VD3 new capacity commissioning, further enhance market competitiveness. According to the company announcement, the 500t coenzyme NMN expansion project will be officially put into production in April 2021; in August 2021, the 800t vitamin An oil and 200t vitamin D3 oil project will be put into commissioning, and after the project is put into production, the company's VA production capacity will increase to 3500 tons and VD3 production capacity will increase to 1500 tons, which is expected to further enhance the company's share and market competitiveness. In addition, the company's 200-ton food-grade, cosmetic-grade and pharmaceutical-grade "hyaluronic acid" raw material project is in the stage of environmental assessment, and is expected to become a new business growth point after it is completed and put into production in the future.
Popular style items continue to expand, and actively layout the medical and beauty series products. The company actively laid out in the field of nutrition and health care, strengthening the promotion of core brands such as Doctor's Best. Its health products sales subsidiary DRB achieved revenue of 432 million yuan in the first half of the year, + 11.5% year-on-year, and net profit of 51.81 million yuan, + 2.3% year-on-year. In addition, relying on its own strong raw material resources, the company has gradually carried out the development of nutritional and health foods such as hyaluronic acid oral liquid, medical series of hyaluronic acid and beauty and skin care products. At present, some products, such as NMN+ hyaluronic acid and hyaluronic acid jelly, are sold in "Wukun" Tmall flagship store.
Risk factors: the growth of the company's product sales is not as expected; the price of the company's products is falling; the progress of the company's new projects is not as expected; the price of raw materials has risen sharply.
Investment suggestion: the company gradually enriches the layout of the whole industry chain of nutrition and health products, and is expected to become the global forerunner of nutrition and health by virtue of its raw material cost manufacturing advantage, differentiated multi-brand and diversified terminal channel development strategy. The homing net profit of the maintenance company from 2021 to 2023 is estimated to be 1.928 billion yuan for 1.30pm 1.603pm, and the corresponding EPS forecast for 1.928 million RMB for 2.16max 2.60max 3.13 respectively. Maintain the target price of 56 yuan (corresponding to 2021 26xPE, reference industry comparable company average valuation level), maintain the "buy" rating.