Performance summary: the company released its mid-year report in 2020, with operating income of 955 million yuan, an increase of 52.22% over the same period last year, and a net profit of 72 million yuan, turning losses into profits. The net profit of Q2 was 52 million yuan.
L benefit from the prosperity of the vitamin industry, brother vitamins smoothly resume production. The vitamin industry was booming in the first half of 2020, and the company's product profits increased. The average price of 20H1 products and the year-on-year situation: VB1 (217 yuan / kg,+19%), VB3 (55 yuan / kg,+27%), VB5 (324 yuan / kg,-5%), VK3 (95 yuan / kg,-3%), the increase in product prices brought about profit improvement, 20H1 gross profit margin of 36.2%, an increase of 14.7% over the same period last year, while the company acquired brother CISA Sodium dichromate, chromic acid and other products contributed to the incremental performance, the subsidiary brother vitamins resumed production smoothly in March, the company's VB1 production and sales gradually returned to normal, and Q2 achieved a net profit of 52 million yuan in a single quarter, the highest quarterly performance since 18Q2. The company's fund-raising project is about to be put into production, with an annual output of 20,000 tons of hydroquinone and 31100 tons of hydroquinone derivatives (phase I project).
L vanillin and contrast media projects will contribute to performance increment. The company's fund-raising project is about to be put into production, in which the first phase of hydroquinone and derivatives includes 10,000 tons of hydroquinone and 15000 tons of hydroquinone derivatives (including 3000 tons of vanillin and 2500 tons of ethyl vanillin). The product structure of hydroquinone and vanillin can be adjusted according to the market, and the anti-risk ability is improved. at the same time, as a major global spice variety, vanillin has a good market prospect. The contrast medium project plans to have a production capacity of 1000 tons, and will become a supplier of raw materials for contrast media in the future, opening up new business areas of the company. Iodine contrast agent is an important project for the company to officially open its pharmaceutical business. in the future, the company will continue to increase the layout in the pharmaceutical field, with a broad space for growth.
L will increase the size of the natural flavor industry. The company plans to raise an additional 1.2 billion, 889 million for the construction of 30, 000 tons of natural spices, and the rest for the Brother Science and Technology Research Institute project and repayment of bank loans. Natural spice projects mainly include dihydrolaurenol, turpentine, camphor, ambergrone, isobornyl acetate, the company will build turpentine industry chain, after reaching production, it is expected to bring income of 1.531 billion yuan and net profit of 206 million yuan.
L profit forecast and investment advice. It is estimated that the company's net profit from 2020 to 2022 is 2.51,3.39 and 408 million yuan respectively. The vitamin boom brings profit improvement and the contribution of spices and contrast agents increases. At the same time, it is optimistic about the future layout of pharmaceutical business and maintain the "buy" rating.
L risk hint: downstream feed demand is declining; project progress is not as expected; vitamin prices have fallen sharply.