The world's leading manufacturer of animal nutrition additives. Focusing on R & D, production and sales of animal nutrition additives, Andisu is the second largest methionine producer in the world, one of the world's six largest vitamin A suppliers and a leading enterprise of important animal nutrition additives in the world. 1) functional products: methionine, vitamin A, ammonium sulfate and sodium sulfate; 2) special products: enzyme preparations, rumen protective methionine, organic selenium and probiotic additives; 3) other products: carbon disulfide, sulfuric acid and preparation services.
Functional products: or ushered in a rise in both quantity and price.
Methionine: an essential amino acid that participates in protein synthesis in animals, but can only be obtained from food. It is the first limiting amino acid for birds, medium-high-yield dairy cows and fish, and the second limiting amino acid for pigs. At the same time, methionine, as an important component of feed, can help animals grow rapidly and save feed costs. More than 90% of methionine is consumed in the feed field, of which poultry feed accounts for the largest proportion. Affected by the global population growth, the improvement of the economic level of developing countries, the continuous development of modern livestock breeding and other factors, the growth rate of global methionine demand has been maintained at about 5-6%, which is relatively stable. Due to the complex methionine synthesis process, high technical threshold, large fixed investment and high intensity of environmental protection, the supply side of the industry has maintained an oligopoly pattern for a long time. In 2021, the global production capacity of methionine is 221.5 million tons / year, and the number of production enterprises is only 9, of which CR4 reaches 81%-Germany Yingchuang, Andisu, Novis of the United States, and Sumitomo Japan. In recent years, after the domestic methionine localization breakthrough, the production capacity has increased rapidly, and the right to speak has continued to strengthen. As about 30% of methionine production capacity is located in Europe, the prices of raw materials and energy and logistics costs in Europe have been rising since this year, and methionine prices are likely to rise. In addition, from the current demand side, the breeding industry represented by poultry is gradually recovering, the demand for doping methionine to replace high-priced soybean meal is enhanced, the permeability of liquid methionine is gradually increased, and the demand for methionine is marginal improved. Andi Su Nanjing Phase II 180000 tons of liquid methionine is expected to be put into production in 2022, with the advantages of global production and marketing network, scale cost, advanced product capacity and other advantages, may fully benefit from the price rebound.
Vitamin A: mainly used as feed additive. VA manufacturers are highly concentrated and the barriers to industry entry are high. In history, supply-side changes caused by industry emergencies often lead to large fluctuations in VA prices. Europe accounts for more than 50 per cent of VA capacity, and VA prices are expected to rise driven by European natural gas.
Special products: the second pillar provides high growth. The company promotes the overall rapid growth of special product business through continuous high investment in research and development. with the continuous enrichment of product types and the continuous expansion of product applications, special product business will provide the company with long-term growth space. Starting in 2014, the company plans to add one new product every year. In 2018, the company acquired Nu Aidi, a leading global manufacturer of special feed additives, to develop its business in the field of ruminants and aquatic products, in coordination with the existing business of Andisu. At present, the company's special products include enzyme preparations, rumen protective amino acids, organic selenium, intestinal health products. In March 2020, Andisu established a joint venture company, Caidisu, and built the world's first Feikang @ protein feed processing plant in Chongqing, which is scheduled to start sales by the end of 2022. Feikang @ protein is a safe, economical and sustainable single-cell protein produced by fermentation of natural gas and natural bacteria. It can be used as a sustainable substitute for other proteins such as fishmeal and soy protein concentrate. The target market of the Chongqing plant is the Asian aquatic feed market with a size of about US $28 billion. According to the company announcement, the special products business accounts for about 24% of the total revenue in 2021, and the revenue contribution is expected to increase to more than 1/3 during the 14th five-year Plan period.
Profit forecast and rating: we estimate that the company's operating income from 2022 to 2024 will be 141.6 / 17.74 billion yuan respectively, and the corresponding return net profit will be 1.704 billion yuan, 2.14 billion yuan and 2.31 billion yuan respectively, and the corresponding PE will be 15.5 times 12.4 pounds respectively. Maintain a "buy" rating.
Risk hints: the risk of a sharp rise in raw material prices; the risk of capacity construction and release that does not meet expectations; the risk that the development of special products is not as expected; the risk that the public materials used in research reports may lag behind or are not updated in a timely manner; the risk of deviation in industry measurement.
