This report is read as follows:
Revenue and profit month-on-month improvement, profitability to maintain a high level, R & D to maintain a high investment to strengthen the competitive advantage, look forward to the development of new business, endogenous extension is expected to coordinate development.
Main points of investment:
Maintain the overweight rating. Performance continued to improve month-on-month, in line with expectations, profitability remained high under fee reduction and fee control, R & D investment strengthened barriers, looked forward to the orderly progress of new business, maintained EPS 2.08,2.22,2.42 yuan in 2020-2022, and maintained the target price of 66.50 yuan.
Month-on-month improvement, performance is basically in line with expectations. Q1-Q3 achieved revenue of 1.443 billion, year-on-year-3.65%; return to the mother net profit of 820 million,-1.6% compared with the same period last year Q3 realized revenue of 507 million, year-on-year-2.74%, return to the net profit of 274 million, year-on-year + 3.52%.
The business structure is stable and the performance of fee control is increased. Q3 gross profit margin is from + 0.2pct to 74.6% compared with the same period last year. According to the gross profit margin, the business structure is expected to change little, tobacco flavors remain relatively stable, and the demand for anti-epidemic, disinfection and sterilization products benefiting from daily chemical flavors is expected to continue the trend in the first half of the year. The cost input is reduced and the superimposed cost control is strengthened. The sales expense rate-1.8pct to 4.8%, the management expense rate year-on-year-0.7pct to 6.8%. The final Q3 net interest rate is from + 3.3pct to 54% compared with the same period last year, and the profitability remains high.
The barrier of R & D is strengthened, and the development of endogenous extension is synchronized. Endogenous technology upgrading and product innovation continued to advance, and 7.7% of Q3 R & D costs maintained high investment, further strengthening barriers. The existing business actively layout new growth points, tobacco flavor actively HNB new tobacco, has formed a relevant sample database and database; food flavors and food ingredients focus on plant extraction, daily plate product line continues to extend. Extension looks for integration opportunities from the point of view of complementary products, complementary channels and complementary upstream and downstream of the industrial chain, which is expected to strengthen coordinated development. At present, there is only 22XPE in 2021, and the valuation is relatively low.
Risk tips: food safety risks, intensified competition in the industry, etc.