Main points of investment
Event: the company released a report for the first quarter of 2022 on April 28, 2022. 2022Q1 realized operating income of 3.457 billion yuan, an increase of 15.50% over the same period last year, a net profit of 427 million yuan belonging to the parent company, an increase of 16.35% over the same period last year, and a net profit of 425 million yuan, an increase of 12.43% over the same period last year.
Comments:
With price compensation, Q1 performance has grown steadily. In the first quarter of 2022, the company's operating revenue grew 15% year-on-year, and gross profit increased 10% year-on-year. This is mainly due to the increase in sales brought about by the rise in the price of functional products and special products. From a business perspective, functional products (including methionine, methionine hydroxyl analogues, vitamins, ammonium sulfate and sodium sulfate) generated 2.526 billion yuan in revenue, and revenue increased by 440 million yuan compared with last year's Q1, including price factor + 759 million, sales factor-114 million, foreign currency conversion-205 million yuan; revenue accounted for 73% (2021Q1 accounted for 70%); gross profit margin was 29%, a decrease of 2 pct compared with the same period last year. Special products (enzyme preparations, ruminant methionine, organic selenium additives, probiotic products, palatable products, mycotoxin management products, butyrate additives, feed fresh-keeping products, aquatic products) generated 731 million yuan in revenue, 23 million yuan lower than last year's Q1, including price factor + 89 million, sales factor-66 million, foreign currency conversion-46 million yuan, revenue accounted for 21% (2021Q1 accounted for 25%) Gross profit margin 48%, year-on-year reduction of 2 pct,; other products (carbon disulfide, sulfuric acid and preparation services) revenue increased 31% year-on-year, revenue accounted for 5.8% (2021Q1 5.1%), gross profit margin 14%, an increase of 18 pct. From the expense side, the sales expense rate of 2022Q1 is 7.3%, which is much higher than that of 2021Q4, but lower than the historical level of more than 10% in the single quarter. The 2022Q1 management expense rate (including R & D) is 7.22%, and the financial expense rate is 0.32%.
The company's main raw materials include methanol, sulfur and propylene. According to wind,2022Q1 methanol, sulfur, propylene prices rose 17.45%, 102.03%, 6.97% year-on-year, while the company through long-term contracts to purchase methanol, sulfur, propylene prices rose 3%, 22% and 10% year-on-year, as far as possible to reduce the impact of rising raw material prices, side contribution to Q1 performance.
The second phase of methionine will be put into production soon, the layout of special products will be improved, and it can be expected in the future. The company's current methionine production capacity is 490,000 tons / year, and its market share is the second in the world, among which it ranks first in the field of liquid methionine. At present, the second phase of the liquid methionine project of the Nanjing plant with an annual capacity of 180000 tons is progressing smoothly, with 6 million hours without accident. 2022Q1 Nanjing plant has successfully completed 45 days of overhaul and maintenance, and has successfully resumed operation, entering the preparatory stage for the trial operation of the 360000 tons (existing 180000 tons) new integrated production platform in Nanjing plant in the second half of 2022. With the upcoming commissioning of Phase II, Andisu's methionine capacity will be further expanded to facilitate the company's more flexible deployment of strategic resources between the two production platforms in Europe and China to achieve the most efficient product production and delivery solutions, thereby further improving supply stability and business profitability.
2022Q1's revenue from special products declined compared with the same period last year, but key products still grew: digestible performance products increased by 14%, aquatic products grew by 24%; ruminant products business in China and Latin America achieved double-digit growth; market penetration of new products RumenSmart and Stermin ML continued to increase; with the continuous increase in selenium penetration rates of Antailai and Healy, the nutrition health business achieved steady growth. The company has launched special product capacity expansion and optimization projects in Europe and China to support business growth, optimize production layout and improve customer service.
With the gradual release of production capacity of the company's new methionine project, on the one hand, it will consolidate its leading position, on the other hand, it may benefit from the increase in methionine prices brought about by factors such as the increase in natural gas prices in Europe and the increased demand for high-methionine feed formula caused by soymeal prices. the improvement of volume-price resonance will bring significant increment to the company's performance. At the same time, the company has accelerated the development of special products and services, and the company has a broad space for growth.
Profit forecast: based on the doubling of Nanjing Phase II production capacity, increased business penetration of special products, and cost reduction driven by the integrated platform, we raised the 2022-2024 net profit to 1.954 billion yuan, 2.255 billion yuan, 2.64 billion yuan (the previous value of 1.89 billion yuan, 2.196 billion yuan, 2.428 billion yuan), and EPS was 0.73,0.84,0.99 yuan, respectively, giving a "buy" rating.
Risk tips: large fluctuations in raw material prices / decline in product prices, capacity construction and release are not up to expectations, and the development of special products is not as expected.
