Due to the commercialization and more effective absorption of 25-hydroxyvitamin D3, the permeability in feed additives is increasing. The company has more cost and efficiency advantages of chemical synthesis, with the release of new production capacity, the leading position will be further consolidated, optimistic about long-term growth space. In addition, the company adheres to the "one vertical and one horizontal" development strategy, promotes the layout of high-end generic drugs, and grasps the opportunities for the development of pharmaceutical collection, which is expected to fully benefit. It is estimated that the annual net profit of homing in 2022-23-24 will be 5.24Universe 7.80Universe 1.061 million yuan, corresponding to EPS 0.95 Universe 1.42 Universe 1.93 respectively. Considering comprehensively PE and PEG valuation method, according to 14 times PE in 2023, the company will be given a target price of 20.0 yuan, covering it for the first time and giving a "buy" rating.
The global vitamin D3 leader promotes the development of "one vertical and one horizontal". The company is a world-renowned vitamin D3 enterprise, which has achieved a breakthrough in a number of international technology monopolies and innovated the traditional production process. The company has the unique advantage of vitamin D3 industry chain integration, and has realized the layout of the whole industry chain from raw material NF cholesterol to 25-hydroxy. At present, the company has four categories of products: lanolin cholesterol, vitamin D3, 25-hydroxyvitamin D3 and refined lanolin. The company promotes the "first vertical" development, continues to make efforts to the terminal layout, and increases the production capacity layout of the whole industrial chain of vitamin D3. The new Jinxi Science and Technology Park is expected to start full trial production in June 2022. In addition, the company implements the "one horizontal" strategy, acquires Garden Pharmaceutical, extends vertically to the downstream pharmaceutical field, and realizes the diversification of the company's business. In 2021, the company achieved operating income of 1.117 billion yuan, an increase of 81.7% over the same period last year, and its net profit was 480 million yuan, an increase of 76.2% over the same period last year.
25-hydroxyvitamin cost advantage superimposed capacity release, contribute to the company's high performance growth. As an alternative source of vitamin D3, the permeability of 25-hydroxyvitamin D3 in feed additives is increasing because of its commercialization and more effective absorption. 25-hydroxyvitamin D3 has very high technological barriers. At this stage, only DSM and Garden Biology produce and sell related end products. Compared with the biological fermentation method, the chemical synthesis method developed by the company alone has significant advantages in convenience and efficiency. at the same time, it can form a better industrial synergy with other product layout of the company and improve the comprehensive utilization rate of lanolin. Limited control of production costs. Through cooperation with DSM and other feed head enterprises, the company has effectively guaranteed the output of downstream products. The company's new Jinxi production base will greatly break through the bottleneck of 25-hydroxyvitamin D3 production capacity after reaching production. As a high value-added product, 25-hydroxyvitamin D3 is optimistic about its increasing penetration in feed and its high growth for the company's performance.
Seize the opportunity of medical reform to promote the layout of high-end generic drugs. As an equivalent substitute for the original drug, generic drugs have important economic and social benefits, such as reducing medical expenditure, improving drug accessibility, improving the level of medical services and so on.
With the increase in the number of patients in some areas, it is expected that the scale of the generic drug market will expand significantly in the future. In 2021, the company acquired Garden Pharmaceutical and cut into the pharmaceutical industry, and by entering the collection list, it quickly opened domestic market sales, increased market share, and improved the business performance of the pharmaceutical sector. In the future, the company plans to adhere to the market positioning of high-end generic drugs, seize the opportunity of pharmaceutical industry reform, continue to increase R & D investment, continue to launch high-value new products, and enrich the profitability of the company's pharmaceutical business.
Risk factors: the risk that the company's project production schedule is not as expected; the risk of vitamin D3 price fluctuation; the risk that the demand for 25-hydroxyvitamin D3 is not as expected; the risk of customer concentration.
Investment advice: the permeability of 25-hydroxyvitamin D3 in feed additives is increasing because of its commercialization and more effective absorption. The company has a more cost and efficient advantage of chemical synthesis, with the release of new production capacity, the leading position will be further consolidated, optimistic about the long-term growth space. In addition, the company adheres to the "one vertical and one horizontal" development strategy, promotes the layout of high-end generic drugs, and grasps the opportunities for the development of pharmaceutical collection, which is expected to fully benefit. It is estimated that the annual homing net profit in 2022-23-24 is 5.24Universe 1.061 billion yuan respectively, corresponding to EPS 0.95, 1.42 and 1.93 respectively, and the current share price corresponds to 14.2 PE in 2022-2024. Considering the PE and PEG valuation methods (the company's 2021-2024 homing net profit CAGR is 30.42%, according to 2023 0.46xPEG), the company is given a target price of 20.0 yuan according to 14 times PE in 2023. Cover for the first time, giving a "buy" rating.
