Event: the company issued a performance announcement of the China Daily, with operating income of 1.608 billion yuan in the first half of 2020, an increase of 3.50% over the same period last year, and net profit of 495 million yuan, an increase of 33.72% over the same period last year.
The price of VA series products has risen, and the gross profit margin of revenue has risen both. The operating income of vitamin A series products reached 376 million yuan, an increase of 1.09% over the same period last year, and the gross profit margin was 77.35%, an increase of 1.21% over the same period last year. According to Baichuan Yingfu, the price of vitamin A has risen first and then fallen since the beginning of this year, with an average price of 427.7 yuan / kg.
The average price last year was 356.6 yuan / kg. It is expected that the overseas epidemic situation will not completely improve in the second half of this year, which will still have a certain impact on the supply of vitamins. The average price of VA this year will be higher than last year.
The price of coenzyme Q10 and gross profit margin increased significantly. The operating income of coenzyme Q10 series products reached 315 million yuan, an increase of 31.07% over the same period last year, and the gross profit margin was 79.78%, an increase of 38.81% over the same period last year. The increase in revenue margin of coenzyme Q10 is mainly due to the impact of rising sales prices, while operating costs decreased by 55.10% compared with the same period last year, mainly due to the decline in unit cost and sales volume. Since the second half of last year, coenzyme Q10 has maintained an upward trend, with Jindawei accounting for more than 60% of the market and benefiting greatly.
Nutrition and health products have achieved positive growth, and NMN is selling well in Tmall's flagship store. The operating income of nutrition and health food reached 829 million yuan, an increase of 4.69% over the same period last year, and the gross profit margin was 34.70%, an increase of 1.25% over the same period last year. Among them, the operating income of DRB increased by 30.11%, which was mainly due to the increase in income brought about by the increase in demand for health products during the epidemic; the operating profit and net profit of Zipfizz increased by 35.42% and 35.19% respectively over the same period last year, mainly due to the combined impact of the growth of online sales during the epidemic and the reduction of offline promotion expenses. NMN sold well at Tmall's flagship store and went on sale for the first time on July 9, and the first batch (about 1500 bottles) sold out a week after it went on sale. Since it was sold out, it has been in the state of reservation for more than a month. As of 8.23, according to Tmall's official website, the total sales of single bottles was 12428 pieces, with sales of 18.63 million yuan at 1499 yuan; and 2 bottles with total sales of 1259 pieces. Sales at 2998 yuan are 3.77 million yuan. The combined sales of the two specifications of NMN products are 22.4 million yuan.
Investment suggestion: Jindawei is one of the major global vitamin A suppliers, coenzyme Q10 market share is expected to be more than 60%, health products have the whole industry chain, the strategy is optimistic about the development of NMN, the company will continue the dual main business model of "manufacturing + brand operation" in the future. It is estimated that the company's EPS from 2020 to 2022 will be 1.76,2.14,2.60 yuan, corresponding to PE 24.6,20.3,16.7 times respectively, maintaining a "highly recommended" rating.
Risk tips: market expansion is less than expected, downstream demand is lower than expected, product prices fall sharply, raw material prices fluctuate sharply, the risk of environmental protection, the risk of production safety. At present, the proportion of the company's NMN products in the company's sales is very low, which does not have a significant impact on the company's current performance, and there is uncertainty about the sales scale that can be realized in the future.