Events:
The company released its mid-2021 report, with an operating income of 11.176 billion yuan, an increase of 28.17% over the same period last year, and a net profit of 451 million yuan, an increase of 5.29% over the same period last year. The increase in sugar sales contributed to steady growth.
Comments: the domestic sugar price is low and the company's sales are high.
In the first half of the year, the company's sugar business achieved sales revenue of 10.475 billion yuan, the best level in the same period in history. Although the domestic sugar price rebounded from the low level, the average price still decreased compared with the same period last year. The main reasons for the good performance of the company's sugar business are: 1) the sugar sales volume has increased rapidly compared with the same period last year, which makes up for the unfavorable factors of the decline in sugar market sales prices and the rise in public and railway freight charges compared with the same period last year; 2) the company expects to combine better and seize the opportunity of the low international raw sugar prices at the beginning of the year to achieve low-cost raw sugar procurement.
The trend of domestic sugar price is improving, and the company continues to expand its scale advantage.
Although the inventory of domestic sugar industry is high, it still restricts the upward space of domestic sugar prices. However, under the influence of many factors, such as the reduction of sugar beet planting area and the recovery of downstream demand, the domestic sugar supply and demand situation has improved in the new squeeze season of 2021x22, and there is no significant downward space for domestic sugar prices. At the same time, due to drought and frost in southern Brazil, sugar production in southern Brazil is expected to continue to be revised down, and international raw sugar prices are rising, which will play a certain role in domestic sugar prices.
The company has obvious advantages in scale in the field of sugar, and continues to expand production capacity. 1) the company is one of the largest sugar importers in China, with an annual operating volume of more than 3 million tons, accounting for 21% of the country's total consumption. 2) it has a sugar production capacity of 700,000 tons / year in China; it has a sugar production capacity of 300,000 tons / year abroad. (3) in the field of port sugar refining, in the first half of the year, the Beihai Sugar "two-step process" project has been steadily promoted as planned and will be put into operation this year, when the company's sugar refining capacity in the port will reach 1.9 million tons / year; at the same time, the company plans to build a Caofeidian refined sugar production line, which will reach production in 2023, and the company's sugar refining capacity will be increased by 150,000 tons / year.
Earnings forecasts, valuations and ratings:
The price of sugar is weak inside and outside, and the profit of imported sugar is less than expected, so we reduce the company's net profit forecast for 2021-2022 to 780 million and 894 million (42%, 45%). At the same time, the net profit forecast for 2023 is 1.012 billion. The EPS of the company from 2021 to 2023 is 0.36,0.42 and 0.47 yuan respectively. Continue to be bullish on the company and maintain its "buy" rating.
Risk tips: raw material price fluctuation risk, policy risk, slow production capacity construction risk