The global leading supplier of vitamin D3 has outstanding advantages in scale and cost. The company's vitamin D3 plate main products are lanolin cholesterol, VD3, 25-hydroxy VD3, refined lanolin four categories. In terms of traditional VD3, the company has become the largest production enterprise in the world after more than 20 years, and the production capacity of feed-grade VD3 is estimated to reach 3600 tons.
At present, VD3 is at the bottom of the price cycle, and the company is expected to further expand its scale advantage by virtue of first-class technology and strong cost control. In the upstream of VD3, NF cholesterol is the only legal upstream raw material. The company is one of the major producers of NF cholesterol in the world, and the lanolin cholesterol production capacity is expected to become the first in the world after the Jinxi base is put into production. The company superimposes the production capacity advantage through the cost advantage of raw materials to build long-term growth space.
Vertical development opens up the whole vitamin D3 industry chain, and the long-term strategic cooperation with DSM demonstrates the strength of the company. The company has unique production capacity of the whole industrial chain of vitamin D3, expanding its products from traditional VD3 to 25-hydroxyvitamin D3. 25-hydroxyvitamin D3 is a high-tech barrier and high value-added product, and it is an effective substitute for vitamin D3. At present, only DSM and the company have the ability to mass produce 25-hydroxyvitamin D3. DSM is a leading international nutrition and health care enterprise, and the company has signed long-term cooperation agreements with it for many times to provide cholesterol, 25-hydroxyvitamin D3, 7-dehydrocholesterol and other products. The deep cooperation with major customers will jointly promote the market penetration of 25-hydroxyvitamin D3 and accelerate the upgrading of vitamin D3 industry chain, which is also the embodiment of the company's comprehensive strength such as world-class product quality, production technology and supply capacity.
The horizontal development of the pharmaceutical industry is expected to open the ceiling of the original cycle products. On the one hand, the company acquired Garden Pharmaceutical in November 2021 and officially entered the pharmaceutical field. At present, the company has a total of 5 products on the collection list, promoting the rapid growth of the performance of the pharmaceutical sector, in addition to 4 varieties under review and 6 varieties under research. On the other hand, relying on the advantages of the existing industrial chain of vitamin D3, the company distributes fully active vitamin D3 and its analogues into the field of downstream ossified alcohol APIs and preparations. Ossified alcohol drugs are used to treat bone metabolic diseases, and the new category will broaden the company's original product structure and help transform and upgrade.
We forecast that the company's earnings per share from 2022 to 2024 will be 0.91,1.22,1.53 yuan respectively. With reference to the comparable company valuation, we give the company a reasonable valuation level of 17 times the 2023 price-earnings ratio, corresponding to the target price of 20.74 yuan, and give a buy rating for the first time.
Risk hint
The risk of vitamin D3 price fluctuation, the lower-than-expected risk of Jinxi Science and Technology Park construction and production capacity release, the risk of medical reform policy change, the risk of failing to be selected in centralized drug procurement, the risk of changing assumptions affecting the calculation results, and so on.
