1. The implementation of the first phase of the employee stock ownership plan has been completed

On the 17th, the company announced the completion of the implementation of the first phase of the employee stock ownership plan, with a cumulative purchase of 43.4484 million yuan through the secondary market, with an average price of 12.5 yuan per share. The current employee stock ownership plan will be launched at the end of 15 years to raise funds for nine senior executives and other employees, including the chairman. The lock-up period is one year, and the chairman himself subscribes for 18% of the share.

2. The company is the largest bone gelatin manufacturer in China, and the industry concentration will be further enhanced.

The company is one of the largest bone gelatin manufacturers in China, whose predecessor can be traced back to Baotou Fine Gum Factory, which was established in 1960. The company has been inherited so far and completed the transformation in 1997, is the core backbone of the industry, has been involved in the formulation of industry standards and guiding technological innovation. At present, the company has a production capacity of 6500 tons, and will expand its production capacity to 10000 tons in the future, ranking first in China. The larger ones in China are Roselo Daan, Jialida Liaoyuan, Guanghan Gum Factory and Qinghai Gelatin. There are many small glue factories with a capacity of several hundred tons in the industry. With the further improvement of the quality and safety level of food and drugs in the future, the concentration of the industry is expected to continue to improve.

3. the demand for gelatin is very stable, and the accumulation of production experience and technology is the core competitiveness.

Over the years, the demand for gelatin market is growing steadily, and the high-end demand is relatively strong, which is insufficient. Gelatin products have the characteristics of long production cycle, long storage and shelf life and stable quality performance. At the same time, the production process requires strong management ability and quality control ability. Combined with these characteristics, although the social supply of gelatin is still growing, it is difficult for those enterprises that lack long-term production management experience and technology accumulation to gain a firm foothold in the market fluctuations.

4. the price of gelatin has stabilized and rebounded from the bottom, and the company's performance has reached an upward inflection point.

Before 2012, the domestic gelatin price was relatively stable, and the CCTV exposure of toxic capsules (chromium exceeding the standard) incident triggered a rapid rise in the price of high-quality gelatin. From the fourth quarter of 13 years to 14 years, the domestic macro-economic slowdown, superimposed industry downstream GMP certification, medical insurance control fees and other factors have an impact on the gelatin market demand, resulting in price decline, price war intensified, while aggregate cost decline lagged behind, industry profits fell to a freezing point.

The company has passed the quality of its products, the industry has a good reputation, and the sales price of gelatin has been relatively high, but the high cost of aggregate preparation and the large investment in developing the market for collagen products in 13-14 have led to a significant decline in the company's performance in recent years. The gross profit margin of gelatin products has also dropped from a high of 33% to about 17%. Since the beginning of this year, aggregate prices have been low and stable, gelatin prices have stabilized and rebounded, and production has started early this year, and shipments have been started around the Spring Festival, all signs show that the company's performance inflection point has arrived.

5. Collagen products have a broad market prospect, and product innovation brings a lot of attention.

Collagen has always been the main focus of the company in the development of gelatin deep processing and downstream applications, and its profitability is significantly higher than that of gelatin. The brand product "round bone peptide" locates the bone and joint health market, and the company is currently conducting controlled trials and clinical applications in conjunction with local hospitals; the company has long carried out research with UCLA (University of California, Los Angeles) on the anticancer function of collagen, and there will be a series of achievements in the future; through the electrospinning products made by gelatin spinning, it has a good application prospect in medical hemostasis and wound suture. These are the points that may lead to a significant increase in profitability in the future.