Event: the company released the semi-annual report of 2022, and in the first half of 2022, the company realized revenue of 7.195 billion yuan, year-on-year + 20.4%; net profit of 869 million yuan, + 6.5%; and net profit of 868 million yuan, + 4.7% of the same period last year. Among them, Q2 achieved revenue of 3.738 billion yuan in a single quarter, + 25.2% year-on-year, + 8.1% month-on-month, and realized net profit of 442 million yuan,-1.6% and + 3.4%, respectively.
Comments:
Methionine sales significantly hedged the increase in costs, and the performance improved steadily in the first half of 22: the company's main products are divided into functional products and special products. In 2022, the operating income of H1 functional products is 5.22 billion yuan, year-on-year + 26%, gross profit 28%, down 8 pct year-on-year; special products operating income 1.54 billion yuan, year-on-year + 0%, gross profit margin 48%, down 4.5pct over the same period last year. The price of the company's main raw materials rose. In 2022, the average price of H1 propylene was 8230 yuan / ton, + 4% compared with the same period last year, the average price of methanol was 2734 yuan / ton, + 12% year-on-year, and the average price of sulfur was 3108 yuan / ton, + 125% year on year. In 2022, H1 Company achieved double-digit sales growth in both liquid and solid methionine, and the 44% increase in methionine sales led to a substantial increase in revenue from functional products. At the same time, the company took the initiative to carry out price management and strict cost control for all its products, partially offsetting the adverse effects of the sharp rise in raw materials, energy and transportation costs.
Nanjing Phase II is about to be put into production, and methionine production capacity is expanding steadily: in methionine, the company combines capacity expansion with the de-necking construction of existing capacity to actively reserve power for future development. The second phase of the Nanjing liquid methionine plant with an annual capacity of 180000 tons is progressing smoothly and is expected to be put into trial production in August 2022 and put into production in the third quarter of 2022. After the new capacity is put into operation, it will form a strong synergy and scale advantage with the existing factories, which is expected to bring a significant cost competitive advantage for the company, and the company's performance is expected to further increase at that time.
Special products are growing against the trend, and the second business pillar is accelerating development: special products are the second business pillar of the company, in which H1 single stomach animal products and aquatic products achieved double-digit sales growth in 2022, while ruminant products in China performed excellent.Business in Latin America, Asia and the Middle East achieved outstanding growth. The rising global raw material costs of agricultural products put pressure on the profits of downstream farmers, so the market demand for special products is weak, but the company's Q2 special products business grew against the trend in 2022, and the gross profit margin showed an upward trend. The company has launched special product capacity expansion and optimization projects in Europe and China to continuously optimize the production layout. Caidisu, a joint venture between the company and Keller, is steadily promoting the world's first Feikang innovative protein product large-scale production unit project. at present, the project has successfully entered the commissioning stage and is expected to start trial operation at the end of 22. The company's active development of special products business will accelerate the development of the second business pillar.
Earnings forecast, valuation and rating: the company's methionine production capacity expansion is advancing steadily, special products are growing against the trend, and the two pillars help the company develop. As a global leader in the animal nutrition and health industry, we continue to be optimistic about its future development. Therefore, we maintain the company's 2022-2023 profit forecast and add 2024 profit forecast. It is estimated that the homing net profit of the company from 2022 to 2024 is 1.966 billion yuan for 1.620, 17.84, and 0.73 yuan for EPS, respectively, maintaining the "buy" rating.
Risk tips: the downstream demand of the aquaculture industry is weaker; the project production schedule is not up to expectations; the price of raw materials fluctuates.
