Event: the company issued a 2020Q3 performance forecast, which is expected to achieve a net profit of 90 million yuan to 117 million yuan in the first three quarters of 2020, an increase of 368.17% to 508.62% over the same period last year, of which the net profit in the third quarter was 18.427 million yuan to 45.427 million yuan, an increase of-7.19% and 128.79% over the same period last year.
Comments:
Product prices fell, Q3 quarter-on-quarter profit decline. In the third quarter of 2020, the price of the company's vitamin products fell month-on-month. According to Wind, so far, the average price of VB1/VK3/VB5 in the third quarter is 159yuan / KG, 85.5yuan / KG and 83.3yuan / KG, respectively, down 10.17%, 26.70% and 74.25% from the previous month. Due to the decline in product prices, the company achieved a net profit of 18.427 million yuan to 45.427 million yuan in the third quarter, down 64.4% from the previous quarter.
Acquire Longsheng South Africa to promote the coordinated development of the company's business. Langsheng South Africa is the only chromate manufacturer near the South African mining area with the richest chromate core raw material "Chrome Mine" in the world. the main products include sodium dichromate, chromic acid, chrome tanning agent, etc., with business income and net profit of 530 million yuan and 48.679 million yuan respectively in 2018. At present, delivery has been completed, and the delivery date is January 10, 2020. Subsidiary performance statement, thickening the company's EPS.
Projects such as hydroquinone and its derivatives and iodine contrast agent are expected to enter the harvest period. The company invests in the construction of hydroquinone and its derivatives and iodine contrast agent in Jiangxi Pengze Jishan Industrial Park. Among them, the annual output of hydroquinone is 20,000 tons.
The total investment of 110000 tons of hydroquinone derivative project is 1.26 billion yuan. The company expects to achieve annual sales income of 163000 yuan and net profit of 191 million yuan after reaching production. According to the disclosure of the China News, the cumulative investment of the first phase of the project is 645 million yuan, with a progress of 93.85%. The product line is in the process of trial production with materials, in which the processes of hydroquinone and catechol have reached the scheduled state of usability. Other processes are expected to reach the intended state of use in September 2020. 1000 tons of iodine contrast agent and intermediates project investment of 320 million yuan, the company is expected to achieve annual sales income of 970 million yuan, net profit of 129 million yuan, is also in the stage of trial production. With the Jiangxi project gradually put into production in 2020, the company's performance is expected to enter the growth period.
Fund-raising projects open up the room for the growth of the company. The company intends to issue no more than 271 million new shares for the construction of natural spice projects with an annual output of 30,000 tons, the construction of Brother Science and Technology Research Institute and supplementary working capital. The project with an annual output of 30,000 tons of natural spices is committed to creating a complete turpentine industry chain with a complete product structure and strong comprehensive competitiveness. the total investment of the project is 889 million yuan, and the construction period is 3 years. The company expects to achieve annual sales income of 1.531 billion yuan in the first year after delivery, net profit of 206 million yuan, total investment rate of return (after tax) 23.20%, investment payback period (excluding construction period) 5.4 years. The project is divided into two phases: 6000 tons of dihydromyrcene, 500tons of α-terpineol, 5300 tons of turpentine and 2000 tons of myrcene, totaling 16800 tons, and 1000 tons of myrcene, 1000 tons of isobornyl acetate, 3000 tons of amberone, 8000 tons of synthetic camphor and 3000 tons of sandalwood ether. The total products of the second phase of the project are 13200 tons. The company's non-public offering fund-raising was approved on August 25, 2020, and the construction of the new project is expected to open up the company's growth space.
Profit forecast and rating: due to the decline of the company's vitamin products, the company's net profit has been revised down to 1. 5%.
26Universe 2.02 PE is 298 million yuan (the predicted value before adjustment is 257,460.504 million yuan respectively), and the corresponding PE is 44.4, 27.8 and 18.8 times, respectively. As the company's new project in Jiangxi is expected to enter the harvest period, the fund-raising project opens the growth space and maintains the "buy" rating.
Risk reminder events: vitamin product prices decline; Jiangxi Phase II project construction and sales are not as expected; fund-raising projects are not as expected.