Investment Summary:
The company is a leading malt manufacturer in China and a world-class malt manufacturer, adapting to the malt industry with significant economies of scale.
The malt industry has capital barriers and is not suitable for small and medium-sized players. The company has 11 automatic production lines with a total production capacity of 850000 tons, ranking first in China and fifth in the world.
The malt industry needs a large investment in fixed assets; raw materials need to be purchased in large quantities, and the operating cost is high; the profit margin of the industry is lower than that of beer, so it is not suitable for the upward expansion of the beer industry; malt is not suitable for long-distance transportation. so generally, about one malt factory in one province is more economical.
The company's raw materials come from countries all over the world, and cover basic + special malt products; the company's production capacity is all over Jiangsu, Zhejiang, Guangdong, Shandong and Hebei, covering more downstream customers; and the company has a higher quality control level than the industry.
It has established a close and stable cooperative relationship with major beer groups, with Yanjing Beer, Zhujiang Beer and Tsing Tao Beer for 30 years, Anheuser-Busch Inbev SA and Carlsberg for more than 20 years, China Resources Beer and Heineken Beer for more than 10 years.
Large beer customers have a long selection process for malt enterprises and generally will not be easily replaced.
Malt differences will have an impact on the taste of beer, the company and major beer groups for many years running-in, can accurately meet the higher requirements of customers.
The company can provide customized malt to improve customer stickiness. The company has provided customized malt products with special technology for Anheuser-Busch Inbev SA, China Resources Beer, Yanjing Beer and other customers, establishing a competitive advantage different from other malt manufacturers.
Raise funds to open capacity bottlenecks and help improve performance. In recent years, the company's capacity utilization and production and marketing rate are all about 100%. The listing funds will help the company to increase its production capacity, which is expected to increase by 230000 tons, and the production capacity will be increased by more than 1x4. On the other hand, there is a large demand for malt in Guangdong and Jiangsu, which is expected to better digest the production capacity.
Investment suggestion: we forecast that the company's revenue in 22-24 will be 3.81 billion yuan / 4.46 billion yuan / 4.15 billion yuan, an increase of + 26% / 17%, 7%; net profit of 120 million yuan / 610 million yuan / 370 million yuan, an increase of-21% / 415%; EPS of 0.23 yuan / 1.21 yuan / 0.73 yuan in the same period The current stock price corresponds to 82 times / 16 times / 26 times of PE. With reference to the valuation level of companies in the same industry, the company is given a 23-year 22x PE, corresponding to a reasonable share price of 27 yuan, covering for the first time and given a "buy" rating.
Risk hint: raw material prices fluctuate abnormally, industry competition intensifies, malt sales fall short of expectations.