Event: on August 21, 2020, the company released its semi-annual report for 2020. During the reporting period, the company achieved a total operating income of 1.017 billion yuan, an increase of 17.24% over the same period last year, a net profit of 43.39 million yuan, an increase of 78.21%, and a non-return net profit of 39.8393 million yuan, an increase of 141.96% over the same period last year.
Comment
Q2 performance is outstanding: in 2020, Q2, the company achieved revenue of 616 million yuan, an increase of 30.8% over the same period last year. The net profit of deducting non-return was 27.9763 million yuan, an increase of 158.4% over the same period last year.
Low sugar and sugar reduction has become a major trend, fully benefiting from the development of the industry: at present, people's demand for health and functional products is increasing day by day, so low-sugar and sugar-reducing products such as erythritol are driven by hot sales of beverages represented by Yuanyu Forest. Demand has increased sharply. In June this year, Yuanyu Forest issued an announcement: sales in the first five months reached 660 million yuan, with 1.94 billion bottles sold. The monthly performance in May has exceeded that of 2018, and it has become the first place on the list of Tmall 618 water drinks.
As a result, the company's erythritol production line has been in a state of full load production, and sales have increased significantly. 2020H1 achieved sales revenue of 210 million yuan, an increase of 37.03% over the same period last year, with 20.54% of revenue and 21.67% of gross profit, an increase of 0.5 pct over 2019 and a net profit of 25.9042 million yuan. Erythritol has the characteristics of natural, zero calorific value, does not participate in blood glucose metabolism, high tolerance and stable acid and thermal performance, and is expected to fully benefit from the opportunities for the outbreak of the industry and create more profits for the company in the future.
Enhance market awareness and build brand reputation: the company has continuously improved the marketing ability of key customers and programs over the years, timely seize the development trend of international and domestic industries, and tailor solutions for customers. At present, the company has become the strategic partner of Coca-Cola Company, PepsiCo Inc, Yili, Mengniu and other well-known enterprises. Among them, the downstream customers of the company's erythritol products mainly include: Yuanyuan Forest, perfect, American SUNLAND, Japan Saroya and so on. With the continuous enhancement of the company's market development ability and customer service ability, the company's performance is expected to rise to a new level.
The product structure is perfect, and the layout advantage of the whole industry chain is obvious: as the only domestic manufacturer and service provider of functional sugar products, the company relies on the unique core technology of functional sugar series products and the advantages of the whole industry chain. To create a complete starch-starch sugar-functional sugar-functional sugar alcohol-pharmaceutical raw materials-probiotics terminal high, medium and low pyramid product structure. In the future, the company's functional sugar leader advantage is expected to be further revealed.
Investment suggestion: we expect the company's net profit from 2020 to 2022 to be 104.195 million yuan and 297 million yuan respectively, and the EPS is 0.280.53 yuan per share respectively. Give "overweight-A" rating.
Risk hints: raw material price fluctuation risk; downstream demand lower than expected risk; industry competition aggravating risk; high customer concentration risk
