Summary of the report:
Vitamin B1 was reproduced again, and the bottom of all kinds of vitamins rebounded.
B1: in 2019, the global demand for vitamin B1 is about 9000 tons, and China's output is about 8600 tons, of which 7137 tons are exported. Since 2018, the competition in B1 industry has intensified, and the product price has gradually bottomed out from a high of 600yuan / kg to 152yuan / kg. Affected by the domestic epidemic at the beginning of 2020, the overseas quotation of B1 rose rapidly to 300 yuan / kg. In March 2020, the company announced that Jiangsu Yancheng base will gradually resume production, and B1 production will gradually restore or even exceed the 18-year level in the future. At present, with the resumption of production of Wuhan Huazhong Pharmaceutical and other enterprises, the price of B1 has dropped to 195 yuan / kg, but it is still 16 yuan / kg higher than the average price in 2019.
Global demand for B3 in 2019 is about 66300 tons, while domestic demand is about 12800 tons.
Since 2017, with the release of production capacity of Ruibang Biology, Brothers Technology and other enterprises, the price of vitamin B3 has gradually dropped from 77 yuan / kg to 30 yuan / kg, resulting in losses for most enterprises. at present, the B3 market quotes 54 yuan / kg, which is 10 yuan / kg higher than the average price in 2019.
In 2020, the paraquat market is weak, pyridine consumption is limited, and the supply of B3 raw material 3-methylpyridine will be tight, which will support the price of B3. The company predicts that the price of B3 will rise steadily this year, while the company produces 3-cyanopyridine. The supply of intermediates is effectively guaranteed.
In 2019, the global demand for calcium pantothenate is about 22300 tons, and the domestic demand is 3300 tons.
Since the second half of 2018, the shortage of raw materials in the industry has caused a shortage of supply, and the price of products has risen from 75 yuan / kg to 380 yuan / kg. In 2020, the price of calcium pantothenate is expected to remain above 300 yuan / kg.
In 2019, the global demand for K3 is about 6200 tons, and the domestic demand is about 1600 tons. Brother's technology market share is more than 35%. Due to the long-term depression of the leather industry, the consumption of chrome tanning agent is reduced, which promotes the reduction of K3 supply and the increase of cost of the co-production of chrome tanning agent. Due to the continuous low price in previous years, the industry is under great pressure. Affected by the epidemic in 2020, the supply of the industry is limited, and the price of K3 is more optimistic. At present, it has rebounded from a low of 56 yuan / kg to 98 yuan / kg.
Langsheng South African Chromium Chemical Co., Ltd., thickening the company's performance.
On May 4, 2020, the company announced that brother CISA will officially resume production on May 1, 2020, when brother CISA is expected to continue to contribute profits to the company. Brother CISA is the LANXESS CISA ProprietaryLimited (Lang Sheng CISA), which was purchased by Brother CISA for 660 million yuan on August 13, 2019. Longsheng CISA's main products include sodium dichromate, chromic acid, chrome tanning agent, etc., 2018-2019Q2 has a net profit of 51.9 million yuan and 19.02 million yuan respectively, and delivery has been completed on January 10, 2020.
The distribution of flavors, fragrances and pharmaceutical intermediates has entered the harvest period, and the 20, 000 t / a hydroquinone, 31100 t / a hydroquinone derivative-phase I project and 1000t/a contrast agent project invested by the company in the Jiangxi base in 2017 have started trial production at the end of 2019 and are expected to gradually contribute to the performance from the second quarter of 2020. It is expected that after the completion of the first phase of flavor and fragrance and iodine contrast agent project, it is expected to bring the company a business income of 7.14 yuan and 970 million yuan and a net profit of 0.91 yuan and 129 million yuan respectively.
In the future, with the gradual release of the production capacity of the company's flavors, fragrances and iodine contrast media projects, the company is expected to develop into a leader in fine chemical subdivision and open up growth space.
Investment suggestion
We estimate that the operating income of the company from 2020 to 2022 is 2.310 yuan 2.811 2.26 billion yuan respectively, the net profit of returning to the mother is 2.32 million yuan 301pm 363 million yuan, and the corresponding EPS is 0.26 pound 0.33 pound 0.40 yuan respectively. The current share price is 5.30 yuan, and the corresponding PE is 21-16-13 times respectively. The average PE of the comparable company from 2020 to 2022 is 16-14-13 times, the company is the domestic vitamin industry subdivision leader, the acquisition of Lansheng CISA opens the vitamin K3, chrome tanning agent industry chain, all kinds of vitamin products rebound low, flavors, flavors, iodine contrast agents and other products have entered the harvest period, the future performance is expected to increase, and the company has higher growth compared with similar enterprises, we are optimistic about the future growth of the company. For the first time, the company was given a "buy" rating of 25 times PE in 2020, corresponding to the target price of 6.50 yuan.
Risk hint
The price of vitamins fell, the resumption of production of brother CISA was not as expected, and the project of flavors and fragrances and iodine contrast media was not as expected.