Event: the company released its report for the third quarter of 2021, with operating income of 2.077 billion yuan in the first three quarters, an increase of 34.64% over the same period last year, and net profit of 160 million yuan, an increase of 198.72% over the same period last year.
Benefiting from the fact that erythritol is in short supply, the company's performance has greatly improved.
In the first three quarters alone, the company's revenue and profits have reached record highs. Affected by the strong market demand for sugar substitute products, the supply and demand of erythritol products were booming in the first three quarters of 2021, and the price of erythritol increased greatly compared with the same period in 2020, while driving the market demand for other functional sugar products. In addition, the company's new production capacity was completed and reached production in the third quarter, with a total production capacity of about 30,000 tons, which further met market demand and led to a substantial increase in performance. in the third quarter, the company's revenue was 820 million yuan, an increase of 55% over the same period last year and 15% over the same period last year. The net profit returned to the mother was 95.78 million yuan, up 832% from the same period last year and 72% from the previous year.
The standard of incentive assessment is high, which fully demonstrates the confidence in development.
This incentive plan intends to award a total of 11.1 million restricted shares to 148 incentive targets, with a large incentive intensity, wide coverage, and deeply bound to a number of core executives. At the same time, equity incentive assesses revenue and net profit at the company level: the target value of operating income is 2.60 billion yuan in 2021-2023, and the target value of net profit is 1.5 billion yuan.
According to the company's revenue and profit target, the compound growth rate of income from 2021 to 2023 was 31.6%, and the compound growth rate of net profit was 50.6%, reflecting the company's confidence in future development. For the first time, the incentive for most middle and senior managers and core technical personnel is expected to stimulate the development potential of the company, and the management is expected to pay more attention to the company's business development through shareholding, which has a more far-reaching long-term significance.
The company has outstanding competitive advantages and is expected to fully benefit from the general trend of reducing sugar.
As a leader in the functional sugar industry, we believe that the company's core advantages come from three aspects: 1) R & D innovation advantages: the company leads the industry in R & D investment level, participates in the formulation of more than 20 industry standards and 1 international standard, and holds the voice of the industry. 2) the advantage of the whole industry chain: the company is the only manufacturer and service provider of all-product functional sugar products in the domestic market. after the new production capacity is completed, the production capacity of erythritol will reach 60,000 tons, and the production capacity of aloxone sugar will reach 30,000 tons. Fully meet the growing needs of downstream customers 3) Brand and market advantages: over the years, the company has continuously strengthened the ability of key customer marketing and program marketing, tailored solutions for customers, and strong customer stickiness. We believe that under the general trend of reducing sugar, with the gradual release of the company's new production capacity, the company's future performance is expected to achieve high growth.
Profit Forecast and Investment suggestion
Taking into account the cost of equity incentives, we adjust the company's profit forecast. It is estimated that from 2021 to 2023, the mother's net profit will be RMB 271,356 million (the previous value is RMB 2.9pm), which is 277%, 44% and 31% compared with the same period last year, and the "Buy" rating will be maintained.
Risk tips: downstream customer demand fluctuations; raw material price fluctuations; increased competition in the industry; product sales are not as expected; the risk of approval failure