Main corn intensive processing, the industrial chain continues to extend. The company is a biotechnology innovation enterprise mainly engaged in corn intensive processing under Cofco Group, and its main business includes food raw materials and ingredients business, bioenergy products and biodegradable materials products. The main products of food raw materials and ingredients business include starch, starch sugar, monosodium glutamate, dextrin and citric acid, bioenergy products are mainly fuel ethanol, and the main products of biodegradable materials are polylactic acid and its products. The company continues to extend the industrial chain, optimize the product structure, actively develop special products, continuously improve the company's profit structure and enhance the company's sustainable profitability by continuously increasing the sales volume of high value-added and high gross profit products. In 2020, the company achieved revenue of 19.909 billion yuan, an increase of 2.25% over the same period last year, and a net profit of 593 million yuan, an increase of 0.05% over the same period last year.
With the flexible use of different raw materials, the profitability of fuel ethanol has been significantly improved. The raw materials of the traditional fuel ethanol production process are mainly corn, and the raw material cost accounts for more than 70%. The fluctuation of corn price has a great impact on the profitability of fuel ethanol. At present, the company has mastered the flexible use of a variety of raw materials, including corn, aged rice, aged wheat, cassava, etc., and has achieved technological breakthroughs in the treatment of different raw materials in the links of pretreatment, fermentation and sewage, thus effectively reducing the comprehensive cost of raw materials and improving the profit stability of fuel ethanol. Although the prices of raw materials such as corn and raw coal remained high in the first half of 2021, the company's revenue from fuel ethanol products reached 6.238 billion yuan, an increase of 31.03% over the same period last year, and the gross profit margin increased by 3.83 percentage points to 19.91%.
Vigorously develop "small special new" syrup, and actively distribute sugar substitute products. In the field of food ingredients, on the one hand, the company makes great efforts to develop "small special new" syrup and special starch; the gross profit margin of small special syrup is significantly higher than that of traditional starch sugar products, and the terminal market application scene is rich, the company has more than 30 varieties. On the other hand, in sugar substitution, the company already has a lot of technical reserves and patents on erythritol and aloxone sugar, and will actively promote sugar substitute products, especially erythritol in the future.
Layout lactide and PHA cut into the biodegradable plastic track and enter a new stage of growth. At present, the company has a series of production technologies of starch / starch sugar, lactic acid, lactide and polylactic acid, and successfully realized the industrial application of PLA. The company announced in September 2021 that it intends to invest 587 million yuan to build a 30, 000-ton lactide project with a construction period of 24 months. At the same time, according to the records of investor relations activities, the company is currently investing in the construction of a 1000-ton PHA project in Jilin. PHA has many excellent characteristics, such as direct degradation in the natural environment without composting, good biocompatibility, variety of monomers and so on. We believe that as the company continues to develop in the areas of PLA and PHA, it will further open the ceiling of the company's growth and profitability is expected to continue to improve.
Profit forecast and valuation range. We estimate that the EPS of the company from 2021 to 2023 will be 0.57,0.72,0.84 yuan per share respectively. Combined with the comparable company valuation, we will give the company 18-20 times PE in 2022, corresponding to the reasonable value range of 12.96-14.40 yuan. For the first time, the company will be given a "better than big city" rating.
Risk tips. The prices of raw materials are rising, the prices of products are falling, and the production of new projects is lower than expected.